ARE PG&E’S MICRO RATE HIKES AN ATTEMPT TO HIDE ACCELERATING RATE INCREASES?
BAKERSFIELD, California, March 22, 2014 – CalCom Solar, a leader in transforming Ag energy liabilities into productive assets, issued a statement regarding PG&E rate hike frequency for California Ag operations:
“PG&E’s Ag rate hikes looks like a new strategy,” said Nic Stover, Director of Business Development for CalCom Solar. “In the past, PG&E would announce rate hikes covering a multi-year time period. Typically, these rate hikes would feature double digit increases. Starting in January 2010, however, PG&E began instituting “mini” rate changes—typically spaced 90-120 days apart. The effect? Over the last 27 months, the most common Ag rate has jumped 13%, with 8 rate changes in that time period alone (Summer On-Peak Rate, AG-5B, see chart). This is a significant acceleration in the rate of increase—22% faster than the average of 4.9% per year over the last 10 years.”
Stover continues: “Five years ago, Ag operations may have shrugged at increases in energy costs. Energy made up less than 5% of annual crop production costs. But now electricity accounts for 15% or more of yearly growing costs—the second largest expense item for growers. And for Ag operations subject to the highest electric rates, PG&E’s new strategy means electricity costs could nearly double in just 10 years and triple in 20 years. Even at the low end, electricity costs could be almost 50% higher by 2025.”
Stover points out that new ROI opportunities available to Ag producers due to the recent implementation of Aggregated Net Metering make it imperative for agricultural operations to review their energy expense planning. “Even if you priced solar power as recently as 24 months ago, the combination of Aggregated Net Metering and accelerating energy cost increases justifies a second look. With our advanced Ag energy forecasting, we are able to model different solar power system sizes, rate changes, utility offsets, and Aggregated Net Metering configurations. We can provide multiple ROI projections, based on different properties producing different crops—with solar panels located in different utility territories. We are even able to get as granular as evaluating the effect that different pump sizes have on ROI.”
For more information, please visit www.CalComSolar.com.