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Apartment dwellers are often at a disadvantage when it comes to reducing their energy costs. It may sound relatively easy to cut down on your power bill by turning off a light switch here and there, or doing fewer loads of laundry. But the big energy savers – such as more efficient appliances – aren’t always available to people who rent their homes.
That may not seem like a big deal, but it can have a significant financial impact for those who live in apartments in San Diego County. The reason is a well-intentioned but outdated rate structure established by the state Legislature in the wake of the energy crisis more than a decade ago. The tiered system created at that time places disproportionately higher costs on people who consume more electricity while capping costs for those who use less power.
On the surface, the current rate structure may seem fair. The reality, however, tells a different story. Take, for example, a higher income couple who own a home on the coast. With cooler weather and the means to install energy-efficient features, these customers fall into the lowest tiers and therefore pay the lowest electricity rates. What’s more, their costs haven’t increased much over time. The price per kilowatt hour in tiers 1 and 2 has risen only 15 percent since 2001, less than half the cumulative rate of inflation during that same period.
Now consider a couple who rent an apartment further inland, where the weather is much hotter. These customers have limited opportunities to take advantage of energy efficiency upgrades and, due to their older appliances and reliance on air conditioning in the summer, pay the highest rates on their monthly San Diego Gas and Electric bill.
Unlike the tier 1 couple on the coast, they’ve also seen an astronomical increase in the rates they pay. Rates in tiers 3 and 4 have gone up a whopping 168 percent in the last 12 years. That’s more than five times the rate of inflation and 10 times the rate at which the tier 1 prices have risen.
This trend is clearly not sustainable and cannot be allowed to continue. Something must be done to address the inequities in the system and fix the rate structure. Otherwise, where does it end? When tier 3 and 4 rates have risen 500 percent or 1000 percent?
Just last month, the Assembly passed Assembly Bill 327, which was introduced by Assemblyman Henry Perea (D-Fresno). Known as the Ratepayer Equity Act, this piece of legislation would restore the California Public Utilities Commission’s historic ratemaking role and allow regulators, utilities, elected officials and other stakeholders to begin discussing ways to create a fair and sustainable rate structure. Critical programs for specified, very low-income customers would remain in place.
I urge the state Senate to vote in favor of this critical bill. Californians deserve a fair system that more sensibly allocates costs and does not punish people for where they live. Let’s seize this opportunity to get our electric system back on track.
Whitney Benzian is the executive director of California Apartment Association, San Diego division.