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Electrical charge an unfair shock to Lodi residents


Monday, October 27, 2008 6:21 AM PDT

Comments (17 comment(s))

A few weeks ago, I suggested that you take a close look at your city of Lodi bill. That led to a few columns about the replacement program for the water and wastewater system.

Well, I want to continue with the "let's take a look at our bill" theme, because there is another little line that is generating some real dollars for the Lodi Electric Utility, and I would like to see it changed.

The line that I am referring to is listed as ECA. ECA stands for Energy Cost Adjustment. The ECA was established by our City Council in Ordinance 1799. It became effective July 6, 2007, and it hit our bills in August 2007. The Lodi Budget and Finance Committee, of which I am now chairman, agreed with the concept of the ECA and is responsible for reviewing the calculation each month. I voted for this — a bad vote, I might add — and I am one of two that reviews the calculation for the committee.

The purpose of the ECA is to adjust Lodi's electric rates monthly based upon costs of electricity. As the cost of the electricity that the Lodi Electric Utility buys goes up or down, so does the ECA. Since hitting the bills in August 2007, the ECA has added just short of $5.97 million to the Lodi Electric Utility — again, presumably to cover costs.

While the idea of covering the changes in the electric market is great, I believe the application here is faulty.

I think it is now well established that Lodi's electric rates are some of the highest in California. It is also well established that our electric utility provides about $10 million per year to Lodi's General Fund, which was budgeted to be about $43.1 million. So we live with high rates partly because of this transfer, but should we live with volatile rates? Should those that conserve the most have the highest percentage changes because of the ECA?

Let me give you an example; Using the current rate structure, if you use 962 kilowatts per month, you have seen your bill since the ECA was implemented swing from $159.81 to $198.77. Remember, the usage remained flat. The only thing that changed was the ECA. In December 2007, the ECA increased your bill by 15.7 percent. In August 2008, the ECA increased your rate 14.7 percent. Sure, the ECA can be negative, but that has only happened once, in September 2007, when the ECA formula was incomplete.

As for those of you who conserve, the ECA really hits you because there is no discount. If you use 625 kilowatts, your average rate before the ECA is about 14.3 cents. In August 2008, the ECA was 2.62 cents, which meant your bill was up 18.4 percent compared to an increase of 12.2 percent for the guy who used 1,443 kilowatts. Does that promote conservation, or does it mean that the big user loves the little guy? This is even worse for Lodi's largest commercial users, and that's bad for business.

I understand that our electric utility is very important to Lodi and that it needs to be very healthy financially. With that said, the ECA should be changed.

First, I think we should have a flat residential rate structure. I think that would do as much for conservation as our current rate structure, and everyone would be treated equally by the ECA.

Second, I think the ECA should change less often. I would like to see the ECA adjusted each quarter or every six months. As it happens now, the ECA hits your bill after you have already burned the hours, so if it goes up there is really nothing that you can do about it. By adjusting the ECA less often, residential and commercial customers would have more stable rates and the Lodi Electric Utility would still have the protection that it needs should the electric market increase.

Finally, I am sure at least a few of you have read this looking for something from me regarding the water and wastewater replacement funds. Well, as my late USC baseball coach Rod Dedeaux used to say when we had a big lead in a game: "Let 'em die." In this case, it seems that all but a very few us understand that the money is not available for replacement, so it is time to let that discussion die as there is nothing further to discuss. What we need to do is keep an eye on Lodi's money so this doesn't happen again.

John Johnson, CFA is a Lodi-based business appraiser. You can reach Mr. Johnson at john@johnejohnson.com or at (209) 369-1451.

Reader Feedback

Gator wrote on Nov 1, 2008 9:21 PM:

" Electrical Companies are one thing municipalities are an otherPG&E, So CAL Edison
San Diego Gas and Electric are all governed by the California Public Utilities commission. They set rates after the company request an increase, public hearings are held with the full board which includes some consumer advocates. Basically the PUC
has their hand on all aspects of Transmission and Distribution of electricity. Its to
involved to go into the investment these companies have in transmitting electricity but
its tremendousIf you have a complaint contact your commercial office, none in your
area call the 800 number. If all else fails file a PUC ComplaintIf you feel you electric consumption isnt right you can request a recording volt meter to verify the usage and it
will also let you know if you have a grounding problem "

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Lodian wrote on Nov 1, 2008 7:48 PM:

" Cogito: I think I'd put up with the electricity going out more often than it does now in exchange for the bill being only around $200 bucks. "

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Cogito wrote on Oct 28, 2008 9:13 PM:

" Also Lodian, when I lived in Woodbridge, my electricity never went out as often as it does with SMUD. And when it did, it came back on line much sooner. P.G.&E. was a lot more reliable. "

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Cogito wrote on Oct 28, 2008 8:57 PM:

" Lodian, SMUD pays no corporate income taxes or property taxes like P.G.&E. does. So they hurt the county coffers, but they provide cheaper electricity. It's a trade off the citizens of Yolo country voted against a couple of years ago, they opted to stay with P.G.&E. I think that is who would be Lodi's best provider. "

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OTH wrote on Oct 28, 2008 7:13 PM:

" At the right top of the bill in the corner the word "premise" is written. Does anyone know what this means? I can't find it on my older statements. "

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LodiJoe wrote on Oct 28, 2008 4:13 PM:

" Ask anyone in the Lodi Utility departments just how much they have collected for "future infrastructure" and what they have spent it on and how much is left and you get NOWHERE. Nobody in the City will divulge that information even though it is OUR money. I find it kinda ironic that after collecting the money from every household in Lodi month after month and year after year they always need to raise rates or float bonds for upgrading our systems. WHERE IS THE MONEY? Probably spent on sculptures for Hutchins Street Square. Open the books, show us what you are doing with OUR money. "

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Lodian wrote on Oct 28, 2008 1:20 PM:

" Cogito: Your bill was only $200.? I think SMUD must be the way to go. "

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classof72 wrote on Oct 28, 2008 10:57 AM:

" I prefer to have my electrical rates reflect the actual cost of electricity, likewise for water and sewer, and for the city to find revenue for other services that are being subsidized by utility rates. One would assume that prospective businesses and residents would be drawn to a city that can provide services for their true cost, and not some inflated price that pays for general fund services that may or may not be utilized or clearly understood. Certainly parks, 3%@50, library, etc., are all noble services, but they should not become welfare cases funded by utility rates. "

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PJ wrote on Oct 28, 2008 9:04 AM:

" 16925: My home was built in 1954. When I bought the house it still had fuses. I immediately installed an HVAC system and the electrical was completely redone. My meter is practically brand new. I do suspect however, that the "averaging" technique is in full swing because my neighbor has reported to me that a meter reader was in her backyard, looking over the fence to check my meter, since I have a dog. I would expect the City of Lodi to contact me if there's a problem reading my meter, OR allow me to read my own meter and report it to them. If that happens, I truly believe my bill will drop drastically..... "

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S & W 500 wrote on Oct 28, 2008 8:59 AM:

" PJ, have an audit done. You might want to A&E Electric or All Star Electric to have a qualified electrician check it out! You definitely have some problem! If you had a large house, a pool, a spa, and an old a/c unit, it might be possible....but this sounds way too high!

Good luck! "

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Cogito wrote on Oct 27, 2008 10:03 PM:

" Wow PJ, that's outrageous. I live in a 2300 sq.ft. house with a wife and a daughter that show a blatant disregard for anything in the same area code as conservation. I freeze in my house in the summer because they think if it's too hot in the house at 75 degrees, you have to put the thermostat on 60 degrees just to get it to 72. The outside lights, front and back, are always on. Same for the garage lights. Ceiling fans, computers, stereos and TVs never seem to get any rest. But, my bill has never been over $200.00 this summer. But then again, I'm on SMUD. "

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16925 wrote on Oct 27, 2008 7:50 PM:

" PJ - do you have an old style meter? "

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PJ wrote on Oct 27, 2008 3:16 PM:

" Observer: Impossible? Hardly. I have had two energy audits, one for each home I have lived over the past five years. The first auditer could not understand why my bills were so high and found there to be "averaging" in my neighborhood since everyone seems to have dogs in their backyards. Once that came to light, my bills dropped. Then I moved, had a second one and purchased energy star appliance because I was told that my appliances were sucking the energy. That was four years ago and my bills have ony gone up. "

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Observer wrote on Oct 27, 2008 10:21 AM:

" PJ, that seems impossible. Take advantage of the utility departments free energy audit. You've either got a malfunctioning meter or somethings running you're not aware of. That's just way too high. "

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fawn lebowitz wrote on Oct 27, 2008 8:53 AM:

" I'm in the same boat PJ-plus I've never been able to dissect that logic behind the rates. Can anyone? Not sure what the answer is but I'm glad someone is out there talking about it. "

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PJ wrote on Oct 27, 2008 8:30 AM:

" Ok - here's my issue. I am single and live in a two bedroom home. I am hardly ever home and when I am home, I am taking care of things around the house. Last month my bill was $655 and some change. I ask you this - WHY, if I am hardly ever home, have energy star appliances and only use the AC when I am home (at a reasonable temp, is my bill so high? I want to take a vote to the citizens of Lodi and REMOVE the LEU and go with SMUD. That $655 bill would then be around $90.00 Anyone in agreement? "

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reality wrote on Oct 27, 2008 8:07 AM:

" a flat residential rate structure would create the same complaints as the flat water rate. 2 people in a 3 bed/2 bath house pay the same as the family with 4 kids. all the seniors are complaining and waiting for water meters so the pay for what you use plan can go into effect. a flat rate for electric would create just another set of problems. "

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Comments on this story are now closed.

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