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Bear Valley Electric asks for Rate Hike

by admin on March 4, 2012
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This article was written by reporter Judi Bowers of The Big Bear Grizzly.

Bear Valley Electric Service has applied for a rate increase. If approved, customers could see as much as an extra $7.56 on their monthly bills.

The application was filed with the California Public Utilities Commission Feb. 16. While the timeline calls for approval as early as December, it could take up to 18 months before the application is approved, said Harry Scarborough, director for the local utility company. The application was filed by Golden State Water Company, the parent company of Bear Valley Electric.

According to the application, Bear Valley Electric hopes to increase its revenues by 9.85 percent. That equates to an approximately 7.79 percent rate hike for customers. Additionally, there is a cost recovery rate in place that is expected to be eliminated from customers’ bills by about 2014, which is around 5.5 percent.

But, sometime later this year, a temporary rate increase is set to take effect that will allow the local utility to recoup costs associated with the January 2010 snow storm and bark beetle tree removal. That increase is about 4 percent, which equates to a little more than $6 for the average customer. Coupled with the proposed general rate increase of $7.56, customers could pay about $13 more every month for a while.

Scarborough said that while the temporary catastrophic event memorandum account rate hike will fall off, as will the cost recovery fees instituted in 2002, Bear Valley Electric will file for more increases in the future. Increases are needed to meet the state requirement to provide 33 percent of its energy via renewable resources by 2020.

In the application, Bear Valley Electric states it is attempting to increase revenue by $4.01 million. The application states $1.64 million is a general office allocation in base rates, $1.05 million needed because actual sales are substantially lower than the adopted sales forecast and $1.32 million due to proposed inflation rates.

Jay Obernolte, Big Bear Lake City Councilman, attended a press briefing on the rate increase Feb. 27 and asked Bear Valley Electric representatives why the increase is needed now. People will be upset if the utility company is arguing for a rate increase because sales decreased due to demand being down as a result of conserving electricity, Obernolte said.

Scarborough said the PUC allows public utility companies to raise revenues to make their financial portfolios whole. The place to argue that it’s a crazy concept is before the CPUC and the Department of Ratepayer Advocates, Scarborough said.

Only about 25 percent of the rate increase goes to offsetting the sales shortfall, Scarborough said. The majority of the funds will go toward upgrading the infrastructure.

Part of the upgrades could include placing electric lines underground along Big Bear Boulevard. When the highway was widened, the vaults were built, but the service wasn’t placed underground. Scarborough said Bear Valley took over the utility company in the 1930s and some of the poles in the ground are from that era.

Also included in the application is a proposal to provide a rebate to consumers who install solar energy. Larger utility companies such as Southern California Edison offer the rebates, but Bear Valley has not been allowed to do so, according to Tracey Drabant, energy resource manager for Bear Valley Electric.

The proposal also calls for approval of an agreement with Snow Summit Mountain Resort for upgrades through a share savings program. The resort uses diesel as an energy source for snow making. The upgrades to the electrical system would allow the resort to use electricity during off peak hours to make snow rather than the diesel, which would be a cleaner energy source and a cost savings.

Bear Valley Electric applied for a rate increase in 2008, which resulted in a change to monthly billing and increases for the past four years. It was met with considerable opposition, and it’s possible this rate hike could face the same uphill climb before approval.

The Big Bear Lake City Council tabled discussion and any action opposing the proposed rate increase at its Feb. 27 meeting. Councilman Rick Herrick, who attended the press briefing on behalf of his radio station KBHR 93.3 FM, along with Obernolte, asked the council to table the matter until Bear Valley Electric could make a formal presentation to the council. Herrick said its a complicated issue that deserves further investigation.

Obernolte asked City Manager Jeff Mathieu to make sure city staff continues to gather information on the proposed rate hike while waiting on the presentation. A public participation hearing will also be scheduled in Big Bear, Drabant said.

If the PUC approves the rate increase, Bear Valley Electric hopes to implement the increase in 2013.

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