Battle regarding proposed SC Edison rate hikes continues

By on November 20, 2017
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Opponents who maintain a proposed 12 percent rate hike is unnecessary say they have something to bolster their argument: the utility’s most recent financial statement.

Union members battling a proposed rate increase by Southern California Edison believe they received some ammunition recently: a statement by the public utility that it’s awash in profits.

The Laborers’ International Union of North America noted that SC Edison reported a $30 million increase in net income for the third quarter of this year, and a $73 million increase for the first nine months of 2017.

Laborers’ International, along with members of the International Union of Operating Engineers, are fighting a request by SC Edison for a 12 percent rate increase, a request it submitted to the California Public Utilities Commission earlier this year.

Members of both unions have attended commission meetings up and down the state, including a meeting in Fontana in May, where they have staged protests and spoken against the measure.

They believe that such a large rate hike would place an unfair burden on poor people and working families. They also maintain that any increase is unnecessary, given the amount of money SC Edison, one of the largest and most profitable public utilities in the United States, is making.

Now, with the utility’s third quarter financial report made public, both labor organizations have another arrow in their quiver, and they intend to use it.

“Yes, we plan to keep the fight going,” said Rocco Davis, vice president and regional manager of Laborers’ International. “Now people can see exactly how much Southern California Edison is getting. They had a $30 million increase during the quarter and yet they’re asking for a rate hike. It’s very arrogant.”

Should the commission approve the increase, rates for SC Edison’s residential users would go up $3.75 a month in 2018, a $45 increase for the year. In 2019, rates would go up $5.65 a month – $67.80 for the year – then $7.29 per month in 2020, or $87.48 for the year

In a statement released last week, Laborers’ International pointed out that SC Edison’s rates are already 50 percent above the national average.

The proposed rate increase, which SC Edison requested in September of last year, would bring in an estimated $1.3 billion.

General rate increases happen every three years, but the latest SC Edison proposal was perceived to be so large that both unions decided to oppose it together.

“It’s ironic that Edison is bragging about to shareholders at the same time they are requesting California’s Public Utilities Commissioners to approve another $1.3 billion rate increase from California working families,” Davis said in a statement. “While Edison executives are pulling in multimillion dollar incomes and shareholders are seeing huge profits, Edison continues to push working families into poverty just to satisfy their greed.”

In a statement last spring, officials with the utility conceded that its proposed rate hike was “substantial,” but claimed it’s needed to pay for several projects

“The proposal … represents a thoughtful and balanced approach to infrastructure investment so that Southern California Edison can ensure safety and improve reliability for our customers,” read the statement, which did not mention any specific projects by name.

It then noted that more and more SC Edison customers are using “distributed energy sources,” including such as rooftop solar and battery storage.

“Clearly, [SC Edison] customers -along with California’s leadership – want Southern California Edison to deliver more clean energy from renewable sources.”

On Friday, SC Edison went a step further, issuing a statement that accused both unions of trying to undermine the International Brotherhood of Electrical Workers.

“The Laborers’ International Union of North America and the International Union of Operating Engineers Local No. 12, in their protests against Southern California Edison, are in effect trying to pressure SCE to break its binding contract with another union, the International Brotherhood of Electrical Workers Local 47,” the statement read.
[Laborers’ International] and Local 12 want work that Southern California Edison is currently contractually obligated to give to IBEW. SCE will not break its binding contracts, period.”

Any issues between the unions won’t be resolved by the commission’s vote on the proposed rate hike, the statement added.

Both unions are now trying to get the rate hike reduced to five or six percent, rather than eliminate it altogether, Davis said.

“We just have to keep holding them accountable,” Davis said. “I think we’ve already succeeded in making people aware of the issue.”

Davis and his cohorts have already raised a serious issue: does a public utility exist solely to make money and please its stockholders, like a publicly held business, or does it have a responsibility to provide its product at a reasonable price so that consumers don’t get gouged, perhaps at the expense of its investors?

“I think it’s an interesting question,” said Jay Prag, professor of economics and finance at the Drucker School of Management at Claremont Graduate University. “Public utilities are heavily regulated, and they can only raise their rates according to the law. They have stockholders, but their profits are restricted.”