So we’re supposedly now trapped on a warming planet, yet a very cold winter last year (3 out of the last 5) hits and we’re now being told cold weather is responsible for inflation busting natural gas prices. Since California’s environmentalist cult controls us all here (from Sacramento and D.C.) this means that struggling Californian’s will pay more, a lot more for electricity to stay cool this summer and in the “caliente” hot future.
Yes, your (most of us outside of San Diego in southern California) electricity bills will increase by at least another 8% this summer (the second increase within a year) and it’s mostly because of another bitter winter outside of the Western U.S. When the newly coined doomsday weather primer “polar vortex” struck the Midwest and Eastern U.S. last winter, millions of people cranked up the heat to marginally stave off the bone chilling cold, sending natural gas prices soaring and they haven’t dropped much since. Incidentally, the northern part of the state is generally served by the Pacific Gas & Electric Company of San Francisco.
As our legislators proudly claim that the state’s power is being weaned off coal plants (7% of our power now) in the war against even clean coal, Southern California Edison (SCE), the largest subsidiary of Edison International has to buy electricity from power plants that use that same natural gas and sells it to customers at preset rates. Over the winter, Edison claims that it didn’t collect enough money from customers to offset the higher cost of the natural gas-made electricity.
So now, SCE having lobbied the state PUC (who doesn’t want for those days in trucking) for a rate increase to pay for all of this, will in typical monopolistic fashion, pass it along. Something truckers find hard to do with new truck prices and diesel. I suggest you look into buying some Edison stock (symbol: EIX) it’s up about 21% from a year ago and has a nice 2.5% dividend.
Sure There’s Low Inflation!
So, when you hear about the U.S.’s low inflation rate 2.1%, just remember that the 8% electrical rate increase is in addition to an increase of 4% just eight months ago because of higher costs than Edison forecast. Let’s do the math (8+4 = 12) a 12% electrical rate increase, along with all the additional taxes. Edison claims that the extra money collected from customers this summer will go to buying electricity, with no markup or profit. Hmmm…
Before 2012, Edison also got electricity from its San Onofre Nuclear Generating Station. But with that source of power and its 2,250 megawatts out of the picture for the last two years, the utility has been relying more on other (mostly out of state 35%) sources, which burn natural gas to create electricity. So when natural gas prices spiked last winter, Edison claims that they were hit especially hard.
In addition to the summer rate increase, utilities and state regulators are working on a new rate structure that would have customers who use less electricity bearing a greater share of the burden. Conserve, so you can pay more is the new green theme. The change wouldn’t happen until mid-2015 at the earliest.
The way it works now, electricity rates are broken into four tiers, depending on how much customers use, with a small flat fee of less than $1 per month. Edison is proposing a new rate structure with only two tiers and a higher flat fee of up to $10. The higher flat fee also allows the utility to collect more money from customers who generate their own electricity with solar panels, but still rely on the grid.
So if you think your investment in solar was sound, this new tiered and flat fee rate scheme will likely make you a somewhat unhappy solar camper if you can figure out your electric bill. And just think, had it not been of fracking natural gas in the U.S., just how much more would have that rate increase been. Make no mistake, whether it’s ObamaCare (ACA), Global Warming or Anti-Fracking etc., this is what’s in store for us all – gross incompetence pretty much.