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Council weighs in on energy rates

The San Diego City Council on Tuesday voted to ask the state Public Utilities Commission to restructure its electricity rates to support conservation measures, while protecting customers from rapid rate increases.

After hearing from dozens of speakers on the issue, the council voted 7-2 for the measure, with the "no" votes coming from the two most responsible for bringing the topic in front of the council in the first place: Todd Gloria and David Alvarez, who wanted the measure to focus more on San Diego Gas & Electric.

At issue is the PUC's plan to revise the rate structure it enacted as a response to the energy crisis of 2001.

At the time, the state imposed a four-tier rate structure designed to encourage energy savings.

Consumers who used the least amount of energy were grouped in the lower two tiers, while those consuming the most energy were placed in the upper two tiers.

Ever since, the two lowest tiers have been either wholly or largely exempt from state-approved rate changes, leaving the upper two tiers to bear the costs.

As a result, according to SDG&E, consumers in the upper two tiers are now paying up to 75 percent more than the actual costs of their service, while consumers in the lower two tiers are paying up to 15 percent less than their costs.

SDG&E has proposed reconfiguring the structure to lower rates for the upper two tiers by 30 percent, while raising the lower tiers's rate by 8 percent.

Gloria and Alvarez -- supported by groups such as the Utilities Consumer Action Network -- have opposed SDG&E's suggestion, saying it would penalize customers who have been trying to save energy.

But SDG&E's supporters have said the current plan favors people who have enough money to live in the moderate coastal climate over people who live inland and have been paying more money, because of their higher electricity usage from air conditioning in the summer and heating in the winter.

"I don't believe people living east of [Interstate 15] should be subsidizing people living west of the I-15," said George Mitrovich, president of the City Club of San Diego, who was among dozens of speakers who spoke out on the measure.

Eric Bruvold, who heads the National University System Institute for Policy Research, said that the current structure -- with one section of the county subsidizing the usage of the other section -- is "simply unsustainable" from an economic standpoint.

In the end, the City Council voted 7-3 against the proposal put forth by Gloria and Alvarez, and instead adopted an amended version proposed by Chris Cate, which proposes general guidelines to the PUC for reforming its rate structures, rather than asking SDG&E to change its own recommendation.

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