Please explain whether a fixed monthly customer charge reduces the proportion of the total monthly bill that the customer can lower through conservation. If so, please explain how a fixed monthly customer charge would provide the residential customers with the appropriate incentive to conserve energy and be more efficient in their use of energy given that the proposed higher residential fixed monthly charges could reduce the proportion of the total monthly bill that the customer can lower. RESPONSE 6: In D.15-07-001, the Commission determined in Findings of Fact (FOF) #24 and #25 that it was uncertain whether fixed cost charges would have any impact on conservation and, if they did, noted that it would be small. Additionally, FOF # 175 found that a fixed charge to reflect fixed costs would send a more accurate price signal to customers. Further, FOF # 176 determined that a fixed charge would assist the customer in making economically efficient decisions regarding energy uses and investments. Thus, residential customers will benefit from a residential customer charge by seeing the true cost of their natural gas service which will help the residential customer to make more efficient energy choices. QUESTION 7: At lines 1-6 on page 6 of the above subject testimony, Mr. Bonnett states high-volume “Because users have a larger portion of their annual consumption at the higher tier rate than low-volume users, the high volume users incur a disproportionate amount of the customer-related costs. In practical terms, this could mean that customers who live in older homes subsidize the fixed costs of gas service of customers in newer, energy-efficient homes, and customers who live in cooler environments inland subsidize customers who live in more temperate environments along the coast. Increasing the customer charge is necessary to reduce this intra-class cross-subsidy to achieve a fair and reasonable distribution of these fixed costs.” (a) Please provide the to support the assertion regarding the intra-class cross-subsidy in the above statement where who live in older homes subsidize the fixed costs of gas “customers service of customers in newer, energy-efficient homes, and customers who live in cooler environments inland subsidize customers who live in more temperate environments along the coast.” (b) In reference to the above statements, please indicate the proportion of SoCalGas and SDG&E customers who live in older homes. Please provide the basis to support your response.
Please explain whether a fixed monthly customer charge reduces the proportion of the total monthly bill that the customer can lower through conservation. If so, please explain how a fixed monthly customer charge would provide the residential customers with the appropriate incentive to conserve energy and be more efficient in their use of energy given that the proposed higher residential fixed monthly charges could reduce the proportion of the total monthly bill that the customer can lower. RESPONSE 6: In D.15-07-001, the Commission determined in Findings of Fact (FOF) #24 and #25 that it was uncertain whether fixed cost charges would have any impact on conservation and, if they did, noted that it would be small. Additionally, FOF # 175 found that a fixed charge to reflect fixed costs would send a more accurate price signal to customers. Further, FOF # 176 determined that a fixed charge would assist the customer in making economically efficient decisions regarding energy uses and investments. Thus, residential customers will benefit from a residential customer charge by seeing the true cost of their natural gas service which will help the residential customer to make more efficient energy choices. QUESTION 7: At lines 1-6 on page 6 of the above subject testimony, Mr. Bonnett states “Because high-volume users have a larger portion of their annual consumption at the higher tier rate than low-volume users, the high volume users incur a disproportionate amount of the customer-related costs. In practical terms, this could mean that customers who live in older homes subsidize the fixed costs of gas service of customers in newer, energy-efficient homes, and customers who live in cooler environments inland subsidize customers who live in more temperate environments along the coast. Increasing the customer charge is necessary to reduce this intra-class cross-subsidy to achieve a fair and reasonable distribution of these fixed costs.” (a) Please provide the to support the assertion regarding the intra-class cross-subsidy in the above statement where “customers who live in older homes subsidize the fixed costs of gas service of customers in newer, energy-efficient homes, and customers who live in cooler environments inland subsidize customers who live in more temperate environments along the coast.” (b) In reference to the above statements, please indicate the proportion of SoCalGas and SDG&E customers who live in older homes. Please provide the basis to support your response.