Letter of Assembly Utilities Committee

1. April 12, 2011
Assembly Member Steven Bradford,
Chair of the Utilities and Commerce Committee
c/o Sue.kateley@asm.ca.gov
Chairman Bradford:
RE: Support for AB 1755 (Perea)
KernTaxis a member-supported, non-partisan, 501(c) 4 non-profit corporation, whose purpose is
to bring about, through cooperative effort and communication, greater economy, efficiency,
and effectiveness in government, basing its recommendations upon the analysis of facts
obtained through research. Being non-partisan,KernTaxis politically independent, viewing
matters and policies in an objective, impartial manner, and taking positions based on the
Association’s adopted principles. Founded in 1939, KernTax has had only one bias, the best
interests of Kern County taxpayers.
KernTax views any government collection of funds through any financial conduit to be taxation,
be it a clearly identified as a tax, a fee for government service or a regulated rate structure. If it
is excessive or not appropriate, KernTax must, by charter, act to educate and facilitate
resolution and ensure fair representation and treatment. Kern County citizens should expect no
less from KernTax and its members. We do not seek subsidies; we simply seek fair return to our
local citizens from all regulatory bodies and their agent for levied taxes, fees, etc. We believe
that this perspective aligns closely with the underlying constitutional compact [California Public
Utilities Code Section 202] from which the CPUC derives authority as well as the goals of the
IOU’s shareholders, and we hope to assist the Legislature and the CPUC in achieving a lasting
resolution of the current structurally flawed residential rate system.
It is the absence of just and reasonable pricing designs, and the unduly discriminatory or
preferential treatment extended to selected beneficiaries both external to the residential rate
class and within that causes KernTax to participate in this hearing before your Committee to
advocate for rational improvements to the current structurally flawed residential electricity rates
of the IOU’s.
Currently, through legislative fiat and CPUC action, the state-regulate IOU’s do not have the
ability to have standard, uniform customer charges in their multi-tiered residential ratestructure.
A standard, uniform customer charge is generally used by utility providers, as part of the
monthly basic distribution charge, to partially cover costs for billing, meter reading, equipment,
service line maintenance and equipment. This charge is the same no matter how much
electricity the customer may use.
When analyzing the nation’s 20 largest utilities, all of them, except PG&E and SDG&E,
have customer charges that average $6.66 per month. SCE has a residential customer charge
Kern County Taxpayers Association 331 Truxtun Avenue Bakersfield, CA 93301-5313(661)322-2973
1 2012/ Communications / State / Support Letter AB 1755 (Perea)

2. of $.87 per month. Analysis has shown that for every dollar per month of customer charge,
upper tier residential rates could be lowered by $.01/kWh. Various customer charges are
illustrated below.
Top 20 Utilities by Retail Sales ($/ month)
Top 20 Utilities by Retail Sales ($/month) March 1, 2010. The Average is $6.66
CLP $16.00
Alabama $14.50
Portland $10.00
Duke $9.22
Progress Florida $8.76
Arizona $8.55
PPL $8.44
PacifiCorp $8.00
Commonwealth $7.64
Virginia $7.58
Baltimore $7.50
Georgia $7.50
Ameren $7.25
Puget Sound $7.00
Progress Carolinas $6.75
Northern States $6.00
Consumers $6.00
Detroit $6.00
FPL $5.90
Reliant $5.59
So. Indiana $5.50
TXU $5.34
PECO $5.31
Entergy Gulf $4.57
PG&E $3.00 (Proposed)
Public Service $2.27
Potomac $2.00
SCE $0.87
SDG&E $0.00
Constellation N/A
California Utilities/Muni's/ID's ($/ month)
Modesto ID $12.50
Shasta Lake $12.33
Turlock ID $11.00
LADWP $10.00
Lassen $10.00
Roseville $10.00
Glendale $8.21
Riverside $8.06
Redding $7.40
SMUD $7.00
Pasadena $5.60
City of Lodi $5.00
Island Energy $4.56
Anaheim $3.06
Merced ID $3.00
PG&E $3.00 (Proposed)
SCE $0.87
SDG&E $0.00
Palo Alto $0.00
Kern County Taxpayers Association 331 Truxtun Avenue Bakersfield, CA 93301-5313(661)322-2973
2 2012/ Communications / State / Support Letter AB 1755 (Perea)

3. These charts are very compelling. During its recent General Rate Case, PG&E was denied its
modest request to include a $3.00 per month customer charge in its multi-tiered residential rate
system. The upper-tier customers of the stated-regulated utilities have the highest electric rates
in the state and the major reason is astonishingly clear. The IOU’s do not have the ability to
charge all of their residential customers a mid-ranged customer charge, that would bring
dramatic economic relief residents in warm weather climates.
Please support Assemblyman Perea’s effort to address this inequity that IOU ratepayers face.
Respectfully,
Michael Turnipseed
Michael Turnipseed
Executive Director
CC: Assm Fletcher – nick.pappas@asm.ca.gov
Assm Buchanan – Christina.lokke@asm.ca.gov
Assm Fong – andrea.graham@asm.ca.gov
Assm Fuentes – isreal.salas@asm.ca.gov
Assm Furutani – eric.guerra@asm.ca.gov
Assm Gorell – mark.timmerman@asm.ca.gov
Assm Hernandez – crystal.quezada@asm.ca.gov
Assm Huffman – lawrence.cooper@asm.ca.gov
Assm Knight – david.orosco@asm.ca.gov
Assm Ma – lizette.mata@asm.ca.gov
Assm Nestande – rob.flanigan@asm.ca.gov
Assm Skinner – liz.mooney@asm.ca.gov
Assm Swanson – larry.broussard@asm.ca.gov
Assm Valadao – Christina.chiappe@asm.ca.gov
Republican Consultant – daryl.thomas@asm.ca.gov
Assm Perea staff – celia.mata@asm.ca.gov
Kern County Taxpayers Association 331 Truxtun Avenue Bakersfield, CA 93301-5313(661)322-2973
3 2012/ Communications / State / Support Letter AB 1755 (Perea)