Rising costs continue to pop up everywhere Californians look, so it’s without great surprise that the Sacramento Municipal Utility District has proposed rate raises.
According to SMUD’s Web site, the General Manager and CEO of SMUD, John DiStacio, has made a recommendation to the Board of Directors to adopt a rate increase to cover the fall in revenue and prevent a drop in the company’s credit rating.
Looking into the future, many Sacramento and surrounding city businesses may have reason to worry about the effect this increase could have on them. Rob Landon, the Rates Administrator at SMUD, stated that General Manager John DiStacio’s original recommendation on March 31, 2009 was a 9.5 percent increase beginning September 1 of this year. He also recommended another 3.5 percent increase to be added on top of that beginning January 2011.
Much to the displeasure of all Californians and business owners alike, SMUD has taken to realizing these steep increases may be a little more than they had expected. On May 15, an addendum was issued proposing a new approach to increases in rates.
According to this recommendation, a three-step rate increase is proposed. On September 1, 2009 a 5.5 percent increase would be imposed. March 1, 2010 would bring another 5.5 percent increase, with one last increase of 2.25 percent coming January 2011.
Landon further explained that the addendum incorporates input from public workshops, the community outreach meetings and the SMUD Board of Directors.
According to a representative in the news and public information office at the California Public Utilities Commission, with populations continuing to rise in California, energy demands are the cause of rate increases.
As stated by the California Public Utilities Commission, “The CPUC regulates investor-owned electric and natural gas utilities operating in California, including Pacific Gas and Electric Company, Southern California Edison, San Diego Gas and Electric Company, and Southern California Gas Company. Collectively, the first three companies serve over two-thirds of the total electricity demand throughout California.”
The utilities listed above have to go through the California Public Utilities Commission to approve any rate changes.
The Sacramento Municipal Utilities Commission states on their Web site, “[SMUD] with a reliable source of electricity at competitive rates that are consistently lower than investor-owned utilities in the state.
With Governor Schwarzenegger issuing Executive Order S-14-08 on November 14, 2008, Californians realize that the increases proposed by SMUD may be the first, but not the last, of the energy providers in the state.
Executive Order S-14-08 directs state agencies to implement a goal set that requires all sellers of electricity in California to adhere to a certain standards to be met by 2020. To read all the details about this Executive Order, and the addendum from SMUD, navigate to the staff reports listed under utilities at publicceo.com.
A public hearing will be held June 4, 2009 in the SMUD Headquarters Building at 6 p.m. Before any rate increases go into effect, a vote will take place at a special meeting on June 16, 2009 at 6 p.m. in the same building.