Proposed rate change public comments
Comments on the 2023 rate proposal (impacting rates in 2024 and 2025) may be submitted by emailing ContactUs@smud.org or by mailing written comments to:
SMUD
P.O. Box 15830, MS B256
Sacramento, CA 95852-0830
All personally identifiable information, including last names, addresses, phone numbers and email addresses are removed prior to posting. If you do not wish for your comments to be publicly available on this page, please indicate that at the time of submission.
Public comments are posted weekly on Wednesdays.
Comments
9/7 - Kyle W.
Do the changes include similar increases to the rate paid for residential solar?
If not, this will further widen the gap between what residential solar generators pay and receive, thus even further reducing the incentive for solar.
It only seems fair that a similar increase be made to the rate paid for excess solar generation.
Kyle W
9/1 - Marilyn R.
I am writing to you to address the new rate increases.
I live in Big Oak Mobile Home Park. I am a senior citizen, just as most residents in this Park are. I live on a very limited income, as most residents do.
A rate increase of $3.61 per month for 2024 , may not sound like much to you, but that amount would mean that much less food for most of us.
Thank you for hearing my concerns.
Marilyn R
8/28 - Mark G.
Good morning Ms. Lesch,
Please forward this to the Directors and staff and place on the SMUD website under public comments on the current rate action, including the attached court opinion in CAPISTRANO TAXPAYERS ASSOCIATION, INC., v. CITY OF SAN JUAN CAPISTRANO. (Or "CTA"). Please tell me if you receive the court opinion. Thank you very much.
Directors and staff,
Please address this during the rate hearing on August 30, 2023. If you believe there is some reason this case does not apply to your proposed rates, or if you have case law to the contrary, please present it. Remember your attorney's opinion is not legal authority. Neither is mine. But case law is.
Also, today I am sending you my first revised report and recommendations on alternatives to the rate changes proposed by the general manager. Please give it the time and attention it deserves, and which the Public Utilities Code requires of you.
It is clear from your CEO and GM Report and correspondence with the Rates Team that your proposed rates are based on your predetermined budgets for the next 2 years.
You may wonder whether there is any case law saying SMUD (or any local government) can set its rates based on predetermined budgets. There is case law saying you CANNOT do this.
“However, if a local government body chooses to impose tiered rates unilaterally without a vote, those tiers must be based on cost of service for the incremental level of usage, not pre-determined budgets.”
I am enclosing this opinion as an attachment to this email.
The full quotation is on pages 2 and 3 of the opinion.
6. On page 27, delete the first sentence of the first complete paragraph, and
substitute this paragraph in its stead: “The way Proposition 218 operates, water rates that
exceed the cost of service operate as a tax, similar to the way a ‘carbon tax’ might be
imposed on use of energy. But, we should emphasize: Just because such above-cost
rates are a tax does not mean they cannot be imposed – they just have to be submitted to
the relevant electorate and approved by the people in a vote. There is no reason, for
example, why a water district or local government cannot, consistent with Proposition
218, seek the approval of the voters to impose a tax on water over a given level of usage
– as we indicated earlier, that might be a good idea. However, if a local government
body chooses to impose tiered rates unilaterally without a vote, those tiers must be based
on cost of service for the incremental level of usage, not pre-determined budgets. (For3
the moment, of course, we need not decide whether such a proposed tax would constitute
a general tax or special tax.)”
(CAPISTRANO TAXPAYERS ASSOCIATION, INC., v. CITY OF SAN JUAN CAPISTRANO, G048969, COURT OF APPEAL OF THE STATE OF CALIFORNIA, FOURTH APPELLATE DISTRICT, DIVISION THREE, (Super. Ct. No. 30-2012-00594579), Order modifying opinion; no change in judgment, dated May 19, 2015.)
The COURT OF APPEAL OF THE STATE OF CALIFORNIA is as far as the CTA case went. It did not go to the California Supreme Court. I am not aware of any case law to the contrary. Are you?
Thank you,
Mark G
8/21 - Raymond T.
Dear SMUD,
My wife and I have been citizens of unincorporated northern Sacramento county for over 23+ years.
We are grateful to SMUD for keeping our electricity rates sufficiently low (compared to PG&E friends) to help raise our 4 children to adulthood. We've
However...
We've been considering investing in solar and battery power infrastructure upgrades within our home as a way of investing for our senior years.
However, we've not found the current "Excess electricity rate" of SMUD policies to be equitably aligned with their stated goals of achieving "...increase reliability, safety and renewable energy benefits for everyone".
I assert the following points, and solicit feedback from SMUD:
- Is it not true that my household investment in solar and batteries would alleviate burden on the local grid, thereby assisting SMUD with reducing or avoiding their investments in additional power generation, thus reducing costs for everybody?
- When I deliver excess power from my household infrastructure to the SMUD grid, particularly during peak energy events, is that access to that power of a greater benefit to the overall SMUD system than is reflected in the Excess power buy back rate, particularly if charging my neighbors peak rates for the power that I am providing?
- Doesn't my use of solar and battery storage help the overall SMUD community achieve SMUD's goals, and thus is of some financial value to the SMUD system and customer base overall?
- Investments made by SMUD customers to deploy renewable energy are a net benefit to all citizens. The characterization of such customers as not paying their "fair share" is inaccurate, since the costs are largely being carried by those customers, and not shifted onto other in the manner described.
- We've been doing our part to adopt energy efficient appliances, install LED lighting, minimize using during peak time-of-use rates, etc. to reduce the amount of power we consume. As we consider adopting electric vehicles over the next couple of years, I want to invest in household electricity infrastructure to make electric vehicles viable. However, the current SMUD policies limit my solar and battery sizing by only looking backwards on past use, with no sizing accommodation for the significant future power consumption needs of electric vehicles. Please remove the cap on solar/battery system size based on old data! If I generate excess power, buy it back at a fair rate that reflects the value based on the demand and time of day. (A flat $0.074/kWh is NOT a equitable rate).
SMUD is not adequately incenting local homeowners financially to adopt more solar and battery storage through more equitable excess power buy back rates. Please explain more reasonably that what I've already read in your current reports, which miss a few key financial and goal-oriented benefits. What are the counter points SMUD might make to the points in this article, "Top three ways SMUD grossly undervalues solar - Solar Rights Alliance" https://solarrights.org/smudfactsheet/?
Please help the SMUD customers and citizens that are willing and able to make personal investments into the SMUD community by providing equitable compensation. SMUD alone cannot achieve the green objectives! Please work with us customers.
SMUD, please consider revising the current policies that fail to financially recognize the benefit provided by investments made by homeowners within the SMUD service area.
"Help me, help you!" - don't just help yourselves, or disproportionately place financial burdens upon those who make such investments, through excessive fees and insufficient compensation.
I would love to receive a well thought out and reasoned response from SMUDD on these issue.
Thank you,
Raymond T
8/13 - Mark G.
Good morning Ms. Lesch,
Will you please forward this to the Board of Directors and relevant staff?
Thank you,
Dear Directors and relevant staff,
SMUD's proposed rates for 2024 and 2025 in the current Chief Executive Officer and General Manager's Report are proceeding on the assumption that you are not bound by Article XIII C of the California Constitution on local government taxes. (from Proposition 26). But you may not be aware of a California Court of Appeals decision which invalidates SMUD's argument. SMUD staff has failed to address any legal questions or comments before which is why I am presenting this to you, the Board of Directors. Please respond and address this well in advance of the August 30 Board of Directors meeting and rate hearing. It is a key question. I am asking for a written response from you now and a verbal response during the August 30 meeting. Unfortunately SMUD has a habit of glossing over arguments and questions without really responding to them or answering them. You know that the format of the rate hearing does not permit me to ask a follow up question or reiterate an argument which SMUD effective dodged, so I am asking now for a thorough written response.
Summary: SMUD's current rates are taxes as defined in the California Constitution because they exceed by more than 10% your reasonable cost of providing electricity service. SMUD may not impose, extend or increase a tax without the approval of 2/3 of the electorate. SMUD has never sought or received such approval for the proposed rates for 2024 and 2025. Therefore the proposed rates are unconstitutional.
Discussion:
Article XIII C, section 2(d) of the California Constitution says:
(d) No local government may impose, extend, or increase any special tax unless and until that tax is submitted to the electorate and approved by a two-thirds vote.
Tax is defined in Article XIII C: "(e) As used in this article, “tax” means any levy, charge, or exaction of any kind imposed by a local government, except the following: . . . ." There are 7 exceptions. The ones which SMUD cites are:
(1) A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.
(2) A charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product.
SMUD's argument about "imposed":
SMUD claims the proposed rates are not taxes because they are not "imposed" on rate payers and its argument is:
Proposition 26 therefore applies only to charges that are “imposed” by local government. SMUD rates are not “imposed” on customers for purposes of Proposition 26, because that language requires some exercise of government force or authority, which is not involved when a public agency, such as SMUD, provides services to customers in a competitive market. SMUD customers pay only for the voluntary use of service, and they have meaningful alternatives to that service, such as self-generation and storage with solar, hydro, fuel cell, wind, geothermal power and batteries. (CEO and GM Report, page 76)
This is nonsense. Is it really practical for an individual living in SMUD's service territory to set up and operate his own hydro, fuel cell, wind, geothermal power and batteries? Solar is becoming more popular but it always relies on SMUD, not only to sell back the excess power during bright, sunny days but also to provide power when the sun doesn't shine, such as at night, or doesn't shine brightly, such as on cloudy days. Solar is a good partial solution; a source of power during limited times when the conditions are right for steady, bright sun. This is not a meaningful alternative to buying electricity from SMUD. As far as I know every resident with solar power is also a SMUD customer. As you know PG&E and other investor owned utilities do not operate in SMUD's service area so this is not "a competitive market."
The reasoning here is supported by case law. There was a case called CITIZENS FOR FAIR REU RATES et al., v. CITY OF REDDING et al. REU stands for Redding Electric Utility.
The Court of Appeals for the Third Appellate District addressed this argument.
“Redding argues Proposition 26 does not apply because the Utility‟s rates (including the PILOT component) are not “imposed.” Redding reasons that “[e]ven if the PILOT were funded by [electric] rates, no force or authority is involved here -- those who wish to buy energy from [the Utility] pay the PILOT (and other costs argued to be funded by [the Utility‟s] service rates) only to the extent they use its service. Those who obtain energy in other ways do not. [There are] other alternatives to electric utility service (such as solar, water, wind and geothermal power) . . . .” The trial court rejected the argument, pointing out that while “legally [the Utility] has no monopoly as an electric utility, the reality is that for many people there are no economically viable alternatives. The Court used the example of a tenant who is renting a house or apartment that is served by [the Utility]. While theoretically possible that a tenant who does not wish to use [the Utility] could install an alternate power source, that is simply not a realistic option.” We agree. A tax does not lose its revenue-generating character because there is a theoretical but unrealistic way to escape from the tax’s purview. The PILOT was imposed under Redding‟s authority to generate revenue for its general fund.”
CITIZENS FOR FAIR REU RATES et al., v. CITY OF REDDING et al., (2015), C071906, (Super. Ct. Nos. 171377, 172960), (reversed on other grounds), page 13
The same logic applies here. A resident, especially a tenant, in a house or apartment that is served by SMUD cannot realistically install and operate hydro, fuel cell, wind, geothermal power and batteries. As for solar if the owner of the house or apartment doesn't want to invest in and doesn't have solar then solar is not an option for the tenant either. You can't do your own hydropower unless you live right on the river and your landlord approves it and the City will permit you to build a dam (and other state and federal agencies) and you have millions of dollars to do it and plan to rent there for the next 50 years or so. It's not a realistic option.
Therefore SMUD's rates really are imposed. Therefore SMUD's rates really are taxes as defined in Article XIII C: "(e) As used in this article, “tax” means any levy, charge, or exaction of any kind imposed by a local government, except the following: . . . ."
Therefore SMUD may not extend or increase its rates either without a 2/3 vote of the electorate, according to section 2(d) above.
SMUD's argument about exceptions (e)(1) and (e)(2):
SMUD also claims Article XIII C does not apply to its rates because, "charges for benefits conferred upon the payor, or for specific government services provided directly to the payor, are excepted under Cal. Const., art. XIII C, subdivisions (e)(1) and (e)(2), respectively, provided that the charge does not exceed the reasonable cost of providing that benefit or service."
As I showed the Board during the 2019 and 2021 rate actions, the original time of day (TOD) rates do exceed your reasonable cost of providing electricity service. This is proven by the document which originally calculated the amount of your marginal cost components and total marginal cost and then inflated the total marginal cost by the addition of a 9.2% "scalar" to get the final numbers for each time period in terms of dollars per kilowatt hour. The original rate resolution. SMUD’s first TOD rates were set on June 15, 2017 in Resolution 17-06-09. The document was the 2017 and 2018 RT02 rate design study.
SMUD published a CEO and GM Report and Recommendation on Rates and Services (the “2017 Report”). That Report contained, as Appendix I, a letter dated December 6, 2016 from NERA Economic Consulting addressed to SMUD’s Resource Planning and Pricing Department (RP&P). The subject of the letter was NERA’s independent review of SMUD’s 2016 Marginal Cost of Service (MCS) Study and its proposed residential Time of Use (TOU) rates for the period 2017 – 2019. That letter was pages 109 – 112 of the Report.
NERA wrote that it had reviewed SMUD documents including the 2018 Residential Time-of-Use Rate (RT02) Design Study (“Rate (RT02) Design Study”).
That study quantified the marginal cost components of SMUD’s then proposed residential Time of Day (TOD) rates. Marginal cost components were: Generation, Capacity, RPS, Transmission, Subtransmission, Distribution, Distribution Facilities, Meter and Services. (page 3) The problem is that after carefully accounting for each Marginal Cost Component SMUD unconstitutionally added a “scalar” of 9.2% to set rate revenues equal to budget revenues.
In other words SMUD had a target for how much money it wanted to take in via residential TOD rates and to reach that target it added 9.2% to its marginal cost.
SMUD’s explanation of this 9.2% “scalar” is:
“The proposed time-of-use energy rate is completed by setting proposed rate revenues equal to rate revenues for the budget year. The reconciliation of marginal costs to rate revenues is accomplished through increasing final marginal cost energy charges by a scalar of 9.2%.”
This is in the RT02 Rate Design Study, page 14, in between Table L and Table M.
I have embedded an image of Table L and Table M directly above, but if you do not see it please find it on page 14 of the 2017 and 2018 Rate Design Study. Again, this document is not contained in the 2017 CEO and GM Report but Appendix I, the letter from NERA Economic Consulting on pages 109 - 112, refers to the 2017 Rate Design Study.
SMUD Rates Team has told me by email that SMUD has not removed or back the 9.2% scalar out of its current or proposed rates. Therefore your proposal to increase rates by 2.75% on January 1 and May 1 of 2024 and 2025 is a proposal, inter alia, to increase the scalar by the same amounts.
Therefore your current rates are taxes as defined in Article XIII C. All of your residential time of day rates have been taxes.
My email earlier today showed that SMUD has failed to cost justify its proposed rates. Please refer to it, as said email is incorporate into this email by this reference. The 2022 Rate Costing Study, which purportedly provides cost justification, does not show any numbers which are associated with or support the proposed rate increases of 2.75%.
The scalar is not associated with any specific marginal cost component. Therefore it is not part of SMUD's reasonable cost of providing electricity service. Therefore exception (e)(2) in Section 1 of Article XIII C does not apply and the limitation in section 2 (d) does apply. Therefore your proposed rates are taxes. You may not impose, extend or increase a special tax without a 2/3 vote of the electorate.
"A tax is extended when an agency lengthens the time period during which it applies. Gov. Code, § 53750, subd. (e). A tax is increased when an agency revises its methodology for calculating a tax and the revision results in increased taxes being levied on any person or parcel. § 53750, subd. (h)(1)."
Webb v. City of Riverside, 23 Cal. App. 5th 244, 258.
Conclusion:
Your proposed rates, based on this analysis, violate Article XIII C of the California Constitution and are subject to cancellation by a court of competent jurisdiction.
Please give a substantive response to this argument as soon as possible and long before the August 30 Board of Directors meeting and rate hearing. It is key to the validity of your proposed rates.
Sincerely,
Mark G.
8/12 - Karin & Eric R.
COMMENT ON PROPOSED RATE HIKE
As home owners with SMUD services, we would like to express our disagreement on the proposed rate hike.
We wholeheartedly support SMUD's commitment to Green Energy, and we have added the optional monthly add on. However, we have seen our bill increase even with our family's very strict adherence to the seasonal time-of-day tier usage, and the addition of EVCredit.
The current infrastructure charge, Greenenergy, and taxes make it almost impossible to keep our energy bills within our budget. How in the world can people continue to afford these increases?
I would like to note that our PG&E bills do reflect our conservation efforts. When we are careful with our usage, we are rewarded with lower bills. This doesn't seem to be the case with our SMUD bill, although I'm sure you will counter argue that you do in fact have time-of-day.
We ask that this current rate hike not be approved.
Karin & Eric R.
8/9 - Gus
To Whom It May Concern,
I am curious to understand how $3 extra on my bill can help reduce carbon emissions. In a society where we truck food 3000 miles across the country, have many throw away products, and we are more or less forced to commute to work every day in a gas vehicle because our suburbs are not built for walking, it seems apparent that without a wholesale shift away from this model, my $3 contribution will have zero effect. Tell China to stop using coal if you really want to lower carbon emissions. Why do Americans need to be forced to spend their hard earned money on the environment when other governments (and nefarious large corporations) are polluting it? All for the sake of making a dollar.
I respectfully protest this increase in my bill.
8/4 - Kwong Family
Dear SMUD,
We are against any rate changes that increases. Please do not increase our rates. We are against zero carbon by 2030, it is unrealistic.
Sincerely,
Kwong Family
8/4 - Mark G.
Hello SMUD Rates,
You give yourself too much credit.
Yesterday I attended the public workshop in person and asked several questions about the proposed rates. I handed a copy of my questions about the 2022 rate costing study to the man at the end of the table near the back of the room, along with a copy of the study and the 2018 rate design study and a couple of other things. He gave them to Crystal, who was the moderator of the meeting.
During my 3 minutes I read the questions out loud.
Alcides (sp?) made the presentation and answered my questions, some of them, but his answers were very brief and superficial.
Nor did he discuss cost justification, other than briefly and superficially, in his answers to my questions. Nor did he say why SMUD has not done a new rate design study. He chose not to include the cost justification in his presentation, even though I sent Jenna Lesch a request for it on July 13, July 28 and August 1.
All of these omissions hinder your rate payers' ability to really understand why you are doing what you are doing. You stretch and exceed the limits of your ability to properly withhold information. As you may know state law requires cost justification among other things. Your CEO and GM Report claims on page 76 the 2022 rate costing study provides the cost justification but it is incomplete as I have said. When SMJUD holds a public workshop and has been asked to discuss cost justification 3 weeks prior and again during the public workshop and still fails to do so, you are not being transparent.
Crystal said the recording of the meeting will be transcribed. We will all be able to see my questions and Alcides' answers verbatim. I don't think any objective and reasonable person would say he really answered my questions. With all due respect I don't think he fully understood my questions. But he did not ask me to clarify them. It also appears there is a bit of a language barrier, but it was not the main problem.
I am asking you again to answer my questions about cost justification, which I will copy into the P.S. of this message.
Regarding the 2018 rate design study and my question whether you have prepared a new one for this rate action, the reason for it is to show cost justification. You can use the same rate structure as you have been using and prepare a new rate design study with the same methodology and format as the 2018 rate design study to cost justify the proposed rates. In my opinion you have not cost justified the proposed rates. I told the Board this too. The fact that you are not proposing a new rate structure is not a reason to not do another rate design study. You need to do some kind of study, whatever you call it, to cost justify the proposed rates, which entails showing all the marginal cost components in $/kWh (as the 2018 rate design study did) and then their sum, plus any scalar you plan to use. Plus the proposed rate increases, as the 2018 rate design study did.
All you have provided is 4 proposed rate increases: 2.75% effective on each of January 1 and May 1, 2024 and again in 2025. This is not cost justification. This is raising rates to meet your predetermined budget needs. You can't do it this way. See Article XIII C of the California Constitution:
"The local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity."
See also this California Court of Appeal opinion from 2015:
“However, if a local government body chooses to impose tiered rates unilaterally without a vote, those tiers must be based on cost of service for the incremental level of usage, not pre-determined budgets.”
(CAPISTRANO TAXPAYERS ASSOCIATION, INC., v. CITY OF SAN JUAN CAPISTRANO, G048969, COURT OF APPEAL OF THE STATE OF CALIFORNIA, FOURTH APPELLATE DISTRICT, DIVISION THREE, (Super. Ct. No. 30-2012-00594579), Order modifying opinion; no change in judgment, dated May 19, 2015.)
We are talking about electricity rates, not water rates, and rate categories, not tiers, but the principle is the same; you have to base your rates on cost of service, not pre-determined budgets.
Thank you,
Mark G.
P.S. Here are my questions about cost justification from yesterday at the public workshop, August 3, 2023:
The CEO and General Manager's Report for the 2024 and 2025 rates says, "The cost-of-service analysis that demonstrates cost-justification for the proposed rates is the SMUD Rate Costing Study ('2022 Rate Study') which is incorporated herein by this reference." (Page 76)
#1. What is cost justification? What does SMUD have to do to cost justify the proposed rates?
#2. Please describe the methodology of the 2022 Rate Costing Study. Why did you do it the way you did it?
#3. Why doesn't the 2022 Rate Costing Study presents the cost justification for the proposed rates in terms of dollars per kilowatt hour? These are the units in which SMUD bills its customers.
#4. The 2022 Rate Costing Study says, "This Rate Costing Study reflects the 2022 marginal cost which is a foundation to design rates." (page 4) Why did SMUD only provide the foundation? What about the rest of the house? In other words the rest of the cost justification?
#5. In late 2016 SMUD did a rate design study titled “2017 (sic) Residential Time-of-Use Rate (RT02) Design Study”, to which the 2017 CEO and GM Report, Appendix I, referred. It was actually 2018. The rate design study presented the cost justification for the original Time of Day rates in units of dollars per kilowatt hour. SMUD has not done a rate design study for the current rate action and the proposed rates for 2024 and 2025? Why not?
8/3 - Anonymous
Just my opinion, but if Smud wanted solar energy to be adopted it wouldn’t keep cutting the benefits of solar year after year. It seems Smud is intent on getting everyone to move to “all electric” and then raise the rates. Classic bait and switch. Makes me re think going all electric with all these rate increases.
8/2 - Mark G.
Good morning Ms. Lesch and Ms. Lofton,
It may not have been clear from when I sent you this message under a different subject line that I wanted the Board of Directors to see my message too. The reason is I presented a question and asked each Director to please read the SMUD 2022 Rate Costing Study, which according to the current CEO and GM Report provides the cost justification for the proposed rates for the next 2 years, and consider my question. I am asking again. Will you please forward this along with the 3 attachments to each of the Directors and appropriate staff? Ms. Lofton I did ask you to forward my July 28 message to the Board. Please forward this one to the Board too. Thank you.
Summary
SMUD's cost justification for the proposed 2024 and 2025 rates is incomplete for the reasons described in this message.
The CEO and General Manager's Report for the 2024 and 2025 rates says, "The cost-of-service analysis that demonstrates cost-justification for the proposed rates is the SMUD Rate Costing Study ('2022 Rate Study') which is incorporated herein by this reference." (Page 76) Unfortunately said study provides only some, but not all, of SMUD's costs and fails to present the total, with the proposed rate increases. It provides what SMUD calls the foundation but it fails to provide the rest of the house. In the absence of a new rate design study for the current rate action SMUD has failed to cost justify the proposed rates.
Discussion
For the convenience of everybody I am sending in this email a copy of the SMUD 2022 Rate Costing Study, which SMUD sent to me last month. You will notice that although some components of marginal cost are presented in terms of dollars per kilowatt hour, the total marginal cost is not. This is an omission which should be cured. The study says, "This Rate Costing Study reflects the 2022 marginal cost which is a foundation to design rates." (page 4)
It may be a foundation but what about everything else? What about the house? According to the Rates department's answers dated July 28 to my questions dated July 13, there is no document which bridges the gap between your 2022 Rate Costing Study and the proposed 2024 and 2025 rates. SMUD has not done another rate design study since the one in 2017 - 2018, nor is it planning to do a rate design study for the current rate action.
For ease of comparison, and to illustrate the omission, I am also sending in this email a copy of the “2017 (sic) Residential Time-of-Use Rate (RT02) Design Study”, to which the 2017 CEO and GM Report, Appendix I, referred. It was actually 2018.
Directors please take a look at Tables L and M on page 14, Tables N and O on page 15, and Figure 4 on page 16. Table O and Figure 4 provide not only the foundation but the entire house; meaning all, not only some, of the components of marginal cost and their total plus the two scalars and the proposed rate increase and their sums.
Table L shows Time of use energy marginal cost. For each Rates Time of Use it shows the marginal cost for each of the 5 marginal cost components and the sum, the Total Energy Marginal Cost.
Table M shows Proposed energy charge. For each Rates Time of Use it shows the Total Energy Marginal Cost from Table L plus the scalar of 9.2% and the sum, the 2017 Energy charges.
Table N shows Proposed Energy Charge Adjusted for Anticipated Budget Year Loadshape. For each Rates Time of Use it shows the 2017 Energy charges plus a 0.35% scalar and the sum, the 2018 Energy Charges w/o Rate Increase.
Table O shows Proposed Residential Charges Adjusted for Rate Increase. For each Rates Time of Use and for the SIFC it shows the 2018 Energy Charges w/o Rate Increase and the 2018 Proposed, which is 1.5% higher.
Notice the units for each of Tables L through O and Figure 4: dollars per kilowatt hour. Except for the SIFC which is in units of dollars per month.
Figure 4, on page 16, is a beautiful bar graph which presents the rates from Table O. A picture is worth a thousand words so I am sending Figure 4 below.
The point is this: from the 2018 Rate Design Study one was able to see everything; all the marginal cost components and then the same with the additions of the 9.2% scalar, the 0.35% scalar and the 1.5% proposed rate increase. The figures in dollars per kilowatt hour (or dollars per month for the SIFC) in Table O and Figure 4 were the final rates proposed by the CEO and GM. The Board adopted these same rates in the rate resolution.
Unfortunately for the current rate action there is no such presentation of data. As I said earlier SMUD Rates told me there is no document which bridges the gap, as the 2018 rate design study does, between (some of) the marginal cost components and the proposed rates, nor did SMUD do a new rate design study nor is it planning to do one. This is an omission which should be cured.
My recommendation is for SMUD to do a new rate design study for the proposed rates or at least fill in the gaps in the 2022 Rate Costing Study by providing the rest of the house, as the 2018 residential TOU rate design study did. The rest of the house refers to data we have seen in Tables L through O and Figure 4 of the 2018 residential TOU rate design study. Without it the cost justification is incomplete.
Directors what do you think about this?
Thank you and best wishes,
Mark G.
P.S. Rates answered "No" to each of the following questions:
#1 Is there a document by SMUD which bridges the gap between your 2022 Rate Costing Study and the proposed 2024 and 2025 rates? In other words which
#2 Has SMUD done another rate design study since the one in 2017 - 2018?
#3 Are you planning to do a rate design study for the current rate action? When? If you do create one please send me a copy ASAP.
7/23 - Jen
Why are residential customers being asked to pay for the increase revenue to EAPR but retail/commercial customers not paying anything extra at all for it? This does not seem fair as we are all suffering higher rates, inflation, and wage stagnation. Businesses are generating record profits, using the lions-share of the electricity and they are not being asked to foot this bill.
I think there needs to be some research into having commercial customers foot at least part of this bill instead of asking families and residents to be solely responsible. Or at least we can get some kind of justification from SMUD as to why this is not a viable option. I understand the commercial customers are having rate increases, but I am not sure what that extra revenue is going to after reading through the SMUD website information.
Thanks,
Jen