Mission Valley Power explains rate changes By Taylor Davison Valley Journal
PABLO — Consumer rates at Mission Valley Power have changed as of April 1. What that means for different groups of consumers has left some confused. Jean Matt of Mission Valley Power explained the changes, and the ways in which they impact everyone. The power company had a rate study conducted earlier this year by the FCS Group out of Washington to determine the company’s financial needs and propose changes to meet those needs. The first step was to determine the revenue requirement for the company to function, determine cost of service class allocation, and design rates to achieve the target revenue. According to Matt, this has been the company’s first rate change evaluation since 2013. A cost of service adjustment (COSA) conducted as part of the study measured the usage and demand correlated to different customer classes, including residential, irrigators, and net metering customers who produce some of their own power via solar panels and the like. What was discovered was that some groups were unintentionally subsidizing the electricity of others, the biggest examples being irrigators paying
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53.2% under the rate recommended by the COSA, and net metering customers paying 59.6% under. “The rate for irrigators hasn’t changed in 34 years,” Matt stated. As for net metering, solar power is only available when the sun is shining, so net metering customers still rely on the power company during the evening and in cloudy weather. This meant the group of approximately 55 customers had rates, according to the report, that were also subsidized by the residential group. Matt explained this happened because they were being charged the same rate as residential even as Mission Valley Power bought back what they produce, resulting in a disproportionate financial break for net metering. Additionally, the COVID pandemic put a strain on residential electricity customers as people began spending significantly more time at home and used more residential power. This paired with the existing rate structure placed too much of the financial burden on the residential category, according to Matt. This resulted in the biggest break in cost for residential customers, the company’s largest client group with approximately 20,000 customers, when rates were restructured. “It’s a rate adjustment, not a rate increase,” Matt
explained. “Some groups will pay less, others will pay more.” One of the biggest differences was the change of fixed charges versus variable charges. The basic monthly charge for residents, not accounting for demand, has increased by $2.50, from $15 on a non-prepaid meter to $17.50. One change residents will see is that the company has introduced a demand charge of $0.25 per kilowatt. Like other electric companies, demand will be determined by the highest peak a customer uses within 15 minutes in a 30-day period. This variable charge for residential customers is based on one of three tiers of kilowatt hours (kWh), where one kWh is equal to the amount of energy used if a single 1,000-watt appliance was kept running for one hour. Tier one is 0-1,000 kWh with a charge of about six cents, tier two is 1,001-2,000 kWh with a charge of about seven cents, and tier three is 2,001 kWh and over with a charge of about nine cents. According to Matt, the variable rates are intended to incentivize energy conservation on the part of the customer. General service customers without demand also saw a basic monthly charge increase of $2.50 from $15.00 to $17.50, as well as a demand charge of $0.30 per kilowatt.
Energy charge summary for all customer groups.
MISSION VALLEY POWER
MISSION VALLEY POWER
Demand charge summary for all customer groups. Residents will now have a demand charge based on kilowatt hours. Irrigators will now pay by kilowatts rather than horsepower.
General service with demand, however, saw increases in both single phase and three phase. Single phase sees an annual average of 4,000 kWh and can cost the power company more to build out to due to the use of specialized equipment. In response, their basic monthly charge has been increased by $5.00 from $27.50 to $32.50 with a demand charge increase of $0.40 from $4.10 to $4.50 per kilowatt. Phase three, with an annual average of 17,500
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kWh, has had their basic monthly charge increased by $8.25 from $45.00 to $53.25, with a demand charge increase of $0.40 from $4.10 to $4.50 per kilowatt. As for irrigators, they now have a basic monthly charge they did not have previously. The COSA report recommended the basic charge for irrigators be set at $55.86, but the monthly rate settled on by Mission Valley was $5. Additionally, the irrigator’s demand charge will be changed from $11.90
based on the horsepower of their pumps and charged annually to $3.00 per kilowatt. Their energy charge was not significantly changed, increasing from $0.0523 per kWh to $0.0526. Net metering customers have seen basic charges adjusted to account for the increased costs of metering and customer service. A single phase $5.00, and three phase $8.25 monthly basic fee was implemented for this group, though see page 7
