The rates of Southern California Edison (SCE) have been increasing for several years. It is common to wonder why Edison is increasing rates so frequently. There are multiple underlying factors related to the increasing rates of Edison. Naturally, these factors are not completely known to the general public. This creates the perception of a booming rate for Edison.
For the increasing rates of Edison, the reasons contributing to the rise include drought and natural gas pipeline expansion. In addition, improvement work in the facility for an improved energy grid highly contributes to the increased rates of Edison. Several other factors raise the cost of energy procurement faced by all.
Users of power supply from SCE, commonly called Edison, may frequently see increasing rates. However, the development of infrastructure and risk management procedures remains the main reason behind this. An in-depth analysis of Southern California Edison shows that all the activities leading towards the increased growth are for the betterment in the long run.
Reasons Behind Edison’s Increasing Rates
Southern California Edison delivers green energy to the local homes and businesses. This is provided by Santa Barbara Clean Energy. It is shown on electricity bills by the field of generation and delivery rates. The customers see a rise in the rates because Santa Barbara Clean Energy replaces the prior Edison generation charges.
In addition to that, there are also vital factors contributing to the increased rates of Edison. Southern California Edison’s energy storage contributes and takes the necessary measurements to support grid reliability. It also significantly reduces the risk of wildfire spread.
So, an estimated increase of approximately $5 per month based on 850kwh for the average residential customer takes place. At the same time, $10 per month based on 850kwh rate increases for the average business customer of SCE.
Another important factor that highly contributes to the increasing rates of Edison is the drought and natural gas pipeline expansion in the previous fall by SCE. This development project of Edison has contributed to the increasing rates faced by the customers of SCE.
The improvement of the energy grid by Edison so that the customers can experience a more reliable service during extreme weather events also increases the rates of Edison. The project to develop their infrastructure to support better service during critical times has had an impact on Edison’s rising rates.
Apart from all these factors, another important one is the rising price of fossil fuels. Throughout the world, the demand for fossil fuels keeps increasing substantially. As a result, the prices also increase from time to time. So, to keep up with the increasing use of fossil fuels in the global market, SCE increases its rates.
Other significant factors contributing to the increase in SCE rates include SCE grid modernization and improvements and upgrades in energy storage and channels. The upgrades in the distribution and transmission of SCE result in increased rates. Replacement of electric poles and development of the infrastructure- all these factors contribute towards the increased rates.
Edison’s Increasing Rates in 2022
Southern California Edison plans to increase its rates further. According to the latest reports, SCE has requested to increase its rates for the years 2021, 2022, and 2023. This application was done in their General Rate Case Application.
SCE also asks the California Public Utilities Commission for an authorized base revenue requirement of $7.601 billion. The requests would amount to a 20.1 percent increase in the year 2021 over the authorized base rates at present. The increases for the years 2022 and 2023 are $366.5 and $534.2 million, respectively.
Conclusion
Many reasons are contributing to the increasing rates of Edison. These factors are for the betterment of SCE in the long run. In conclusion, the increasing rates of Edison will turn out to be for the better for their users.
