LOS ANGELES (AP) -- Southern California's largest electric utility is getting pushback from consumer groups opposed to its plan for a rate hike that would boost monthly bills for most customers by nearly a tenth.
Hearings are being held in Los Angeles and San Francisco over the next few weeks on $3.2 billion in increases for residential and business users. Southern California Edison said they are necessary to restore its aging grid, patch up its recession-racked pension fund and upgrade its online security systems.
Consumer advocates said the utility, which serves 14 million people and 285,000 companies, is asking for the rate hike so it can pad executive paychecks and squander the cash on unnecessary administrative expenses.
"We think the amount Edison is asking for is pie in the sky and way above what is justified," Utility Reform Network executive director Mark Toney told the Los Angeles Times. "Hopefully, it's way more than they are going to get."
Edison is presenting its rate hike request to an administrative law judge who will make a recommendation to the state Public Utilities Commission. The panel is expected to rule on the request by early next year.
The increase would boost electricity bills for average users -- those who use about 600 kilowatt hours per month -- by 9.1 percent. Customers who use less than 300 kilowatt hours would see increases of 5.9 percent, while those who use more than 800 kilowatt hours would see 11.1 percent increases.
Business, institutional and agricultural users would see rates go up between 5.8 and 6.9 percent, Edison estimated.
Edison provides power to most of Southern California, with the exception of San Diego and cities such as Los Angeles that have their own power services.
The utility said the cash would be used to connect more customers to its grid while it upgrades transmission lines and buries them underground, in addition to covering recession-related losses to its pension fund and upgrading its anti-hacking software. The increase would also go toward ensuring that employee salaries remain competitive.
"Our objective is to preserve grid reliability and security while keeping rates as affordable as possible," said Russ Worden, the head of Edison's rate case team.
Edison defended its need to boost salaries, citing a study completed for the utility and the PUC's Division of Ratepayer Advocates that found pay to be 4.7 percent below market for comparable jobs at other firms.
The commission's ratepayer advocacy agency appeared to be siding with consumer groups, calling the rate hike request inflated and saying it's as much as 80 percent higher than needed to cover operating costs and upgrades.
"Edison should be looking to trim its expenditures and be more sensitive to its customers," Joe Como, the division's acting director, told the Times.
Information from: Los Angeles Times, http://www.latimes.com
Copyright 2011 The AP.