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| Count Eddie |
Edison Rate Hike To Effect Water Costs: Staff has been notified that Edison's rates for our water wells and booster pumps is increasing by 22.4%. Staff has met with the City's Edison Account Manager to work out ways to save elsewhere in our system, find other rates, etc. That work is in progress; in the meantime, the increase in Edison rates is included in the staff report for July 9th regarding the purchase of imported water and will be included in the water rates study.
Some questions that first need to be asked. Why is it that Edison has specifically targeted Sierra Madre's financially crippled water company for this bit of opportunistic price gouging? Those people they send to watch our meetings, the ones who act like they are so concerned about our little city when they speak (endlessly) from our public comment podium, do they take notes in hopes of uncovering opportunities to suck even more money out of this place?
You'll have to admit that this couldn't have come at a worse time for Sierra Madre. The timing is actually quite diabolical when you consider some of the financial pressures the water company is under. Just keeping up with water main breakage alone is consuming quite a bit of money that isn't really there. And then there are always the payments that must be made on nearly $19 million dollars (interest included) in Bart Doyle era water bond debt. Something that consumes close to $1 million in water revenue per year alone.
There is also this. Pumping in water from outside sources was always going to be an expensive proposition. We are hardly in a position of control here. By tacking their 22.4% rate increase onto that particular operation isn't Edison also doing the maximum possible damage it can to our already crippled water enterprise?
Here is a scenario for you. Edison's current unctuous meeting minder (his name escapes me, but then what would be the actual benefit in remembering it?), has attended every last minute of our recent City Council meetings. This individual certainly must have noted that the Water Enterprise is about to begin bringing in more money. The system of financial penalties recently initiated by City Hall, supposedly to curb water use in town, is almost certain to create more revenue here. There are also the water rate increases the City hopes to be able to put in place later this year.
So did Edison conclude that this additional financial penalty revenue will be significant, and that because we really have no other options available for electricity, they should use their monopoly control here and - Mafia-style - just grab their share of the take? Or even all of it?
Are they also positioning themselves to grab a chunk of the water rate increase as well?
It is not like Southern California Edison needs the dough. As the monopoly provider of electricity to much of the Los Angeles County area (and beyond), they really do have a pretty sweet set up. According to reports I have seen their shareholder profit alone in the year 2012 was nearly $1 billion dollars. This despite inept service and serial power outages. Check out this excerpt from an opinion piece regarding Edison that appeared late last year in the Santa Barbara View (link):
Southern California Monopoly Headlock ...Or I was, until I investigated their Return on Equity (ROE) profit margin, and checked out where their income goes, like the compensation for their senior executives. Now, I do not begrudge Smart People getting paid well, even if Smart Meters seem to be funding it all. I want companies to thrive, even Public Utility Companies, who are regulated and policed supposedly, by their State Commissioners, or you end up with a disastrous lack of response and capacity, as evidenced in the northeast after hurricane Sandy.
I was unprepared for the magnitude of some of the finances … Profit to shareholders in 2012 was $975 million. So Cal Edison is asking for an 11.1% ROE for 2013. By comparison, Portland Energy has never received more than 8.75.
Mark Pocta, a manager for an independent branch of the Public Utilities Commission that advocates for consumers, states that California is one of the highest rates of returns in the nation.
Edison blames our regulations, saying they make it difficult for the company to stay competitive. “SCE’s request (11.1%) is slightly higher because we face slightly greater challenges,” testified Paul Hunt, director of finances and economics at Edison. He argued that “SCE is in the middle of a multi-year project to expand and strengthen its power grid to continue serving its customers reliably.”
I’m not feeling too sorry for this utility company, who pretty much has a monopoly on the market, with the parent company, Edison International (EIX), enjoying an earnings increase of 27% in 2010.
Perhaps it is time the City Council took a good hard look at taking as much of the Sierra Madre Water Department solar as possible. Especially the facilities where our water is drawn and pumped. If we are being forced to endure a greedy monopoly power company that sees our every move only as an opportunity to further gouge us for even more money than it is already receiving, then perhaps it's time we recognized this as an abusive relationship we need to leave. Taking the Water Department solar would be a significant step in that direction.
One more thing. By so blatantly going after our Water Enterprise, and at so vulnerable a time as this, Edison has shown that all of the "good partner" talk we have been forced to endure from them over the years was little more than cynical public relations propaganda belying their true intent.
It is high time we called them out.
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