In late March, PG&E asked the California Public Utilities Commission to boost rates by another $43 million per year from California's farm families. This comes on top of a December request by PG&E to increase rates for farms and water agencies by $48 million. Combined, the proposed rate hikes represent more than a 13% increase in electricity rates for farmers.

"It is unconscionable for PG&E to be seeking such massive rate increases at the same time our economy continues to struggle and unemployment in farm communities exceeds 18 percent overall," says Michael Boccadoro, Executive Director of the Agricultural Energy Consumers Association. "Family farms and rural communities are already suffering from water shortages and a struggling economy. This proposal from PG&E could just be the straw that finally breaks the camel's back."

Specifically, PG&E has requested that the CPUC boost electricity rates paid by agricultural and water pumping customers by 7.1% later this year then increase them again by an additional 6.0% in early 2011. Both of the price hikes stem from PG&E's request to increase rates for all customers by $835 million next year, with additional increases slated for 2012 and 2013.

The rate hike for farms comes at a particularly difficult time for San Joaquin Valley farmers. Farmers are facing the need to use more electricity to pump groundwater to make up for court imposed cutbacks in Delta water delivery operations.

Due to the recent drought and court-mandated cutbacks in water deliveries, agricultural energy use for irrigation purposes has increased significantly in recent years. This is occurring at the same time that an increasing number of farms are switching from diesel-driven irrigation pumps to cleaner electric-drive pumps. 

Unfortunately, rates have also escalated during the past decade. PG&E agricultural and water pumping customers who take service on "time-of-use" rates, which help conserve energy during peak summer demand, have seen their rates climb, on average, from 8.78 cents/kWh to 12.45 cents/kWh, a 41.7% increase between 2000 and 2010.

"PG&E's rates are already among the highest in the nation and now they want to raise them even more. Enough is enough," Boccadoro concluded.

The PUC will rule on both requests over the course of the next 12 months.  California farm families and AECA will be joining with other customer groups to fight the proposed rate hike at the CPUC.

The Agricultural Energy Consumers Association is a non-profit organization representing the energy interests of California agriculture.