PUC to Discuss Rate Hike Proposal : Utilities: Edison is seeking a 3% increase in revenue. Boost is opposed by the commission staff and consumer groups.

LAGUNA BEACH — The California Public Utilities Commission will convene in Orange County Monday night to consider a rate increase requested by the Southern California Edison Co. but opposed by the commission’s own staff and consumer advocacy groups.

PUC officials said it was too early to tell whether the request would be affected by Wednesday’s far-reaching decision to eventually allow customers to choose their own electricity providers.

The utilities company has requested a $117-million increase in revenues for 1995, followed by additional increases of $121 million in 1996 and $111.2 million in 1997. While the initial increase would represent a 3% revenue boost, a spokesman said, additional projected revenues from increased electric sales would result in customers seeing only a 1% rate boost--about 62 cents--in their monthly bills. The average monthly bill for 500 kilowatt hours of power, he said, would jump from the current $62.29 to $62.91.

“This is the beginning of the process,” Kyle DeVine, a commission spokeswoman, said of the public hearing, scheduled for 7:30 p.m. in the Council Chambers at Laguna Beach City Hall. “We want to hear comments from the public.”

In addition, the company has asked for an increase in service charges--jumping from $5 to $15 for turning electricity on the day after Edison is called and from $10 to $25 for same-day service. The company has also requested increasing its bad-check charges, from $5 to $10, and hiking its field visit charge from $5 to $15.

“Our expenses have increased,” explained Alex Miller, the utility company’s treasurer.

Specifically, he said, the proposed increase has been necessitated by four factors: inflation, the spiraling cost of providing health care benefits for employees, growing conservation expenditures by the company and mounting costs associated with the new equipment required to serve a customer base that has grown by 37,000--about 1%--over the past two years.

“We need to spend what it takes to get the job done,” Miller said.

Company officials concede that Edison’s rates are already among the highest in the country, but attribute that to several factors, including the state’s air quality restrictions on the use of coal as an inexpensive energy source. They also point to the fact that because of the area’s temperate climate, customers use less electricity, while fixed costs for the utility remain high.

PUC staffers, however, reject such arguments as exaggerations borne of self-interest.

“We believe they can do better,” said Ramesh Ramchandani, project manager for the PUC’s Division of Ratepayer Advocates, which analyzes rate increase requests for the commission. Based on an analysis of Edison’s expenditures in several areas, he said, the division concluded that Edison is not doing enough to cut its own operating costs. The group, far from backing the proposed increase, favors a cut in electric rates of 8.5% (or about $340.6 million) over the next three years, he said.

“We believe it’s in Edison’s interests to shave costs because this is an era of fierce competition,” he said, alluding to this week’s decision by the PUC to break the monopoly of utility companies by allowing residential customers to choose from among several major providers beginning in 1996. Smaller industrial users would be added in 1998 and small-business customers in 1999.

“It would work to Edison’s detriment to further increase rates at a time when the economy is in such abysmal condition and competition is on the rise,” Ramchandani said. “By doing better, Edison would make itself more competitive and its services more appealing.”

Bob Finkelstein, staff attorney for Toward Utility Rate Normalization (TURN), an independent consumer advocacy group, agreed.

“Given Edison’s extraordinarily high rates,” he said, “asking for more is exactly the wrong thing to be doing at this time. We think it’s important that the commission take this opportunity to cut Edison’s costs wherever it can.”

In addition to Monday’s hearing in Laguna Beach, the PUC has scheduled hearings over the next month in Long Beach, Culver City, Palm Springs, Palm Desert, Ventura, Monrovia, Ontario and Visalia. After receiving input from the hearings, DeVine said, the five-member commission will make a decision in December. Any rate increase granted, she said, would take effect on Jan. 1, 1995.