Sunday, February 21, 2010

CalFirst in Livermore

LIVERMORE — City leaders Monday will consider signing up Livermore for a program that would help homeowners finance energy-efficiency improvements with no upfront costs and pay back the loans on their property taxes.

Under the CaliforniaFIRST program — a new initiative by a group called the California Statewide Communities Development Authority — bonds will be issued for residents to install environmentally friendly appliances such as solar panels and low-flow toilets, officials said.

Pleasanton and Dublin already have joined the program, which comes at a relatively low cost to participating cities but could substantially help lower emissions and conserve energy, officials said.

If the City Council approves the plan, Livermore would pay a one-time setup fee of $15,000 and would not be part of the financing process, said Livermore's principal planner Susan Frost.

"This is all voluntary (for residents)," Frost said. "It's just one option for financing those types of improvements to their homes."

Under the CaliforniaFIRST Program, residents could apply for loans of up to $75,000 to make clean-energy improvements to their homes. Loans, which would be added onto property taxes, would be repaid over a 5- to 20-year period, according to a fact sheet on the CaliforniaFIRST Program.

Also Monday, the council will also consider a plan to update the city's development code, which hasn't been updated since 1960.

The code doesn't emphasize design elements and is text-based without diagrams or illustrations, making it difficult to administer, according to staff reports.

The proposed updated code emphasizes detailed design standards north and south of downtown that will emphasize the area's unique historic character, the reports said.

A number of public hearings already have been held to gather input on the updates.

Contact Jeanine Benca at 925-847-2125.

IF YOU GO
WHAT: City Council meeting on energy-efficiency plan
WHEN: 7 p.m. Monday
WHERE: Livermore City Council Chamber, 3575 Pacific Ave., Livermore.
INFO: www.ci.livermore.ca.us

Saturday, February 20, 2010

Property Tax Assessment Financing


Pursuant to AB 811, the State of California’s Clean Energy Municipal Financing Law signed into law last year, property owners may finance energy efficiency and renewable energy projects that are permanently affixed to the property. Recent legislation, AB 474, expanded the Program’s reach to include the financing of water efficiency projects. Eligible projects under the CaliforniaFIRST Program may include but are not limited to air sealing, wall and roof insulation, energy efficient windows, tankless water heaters, photovoltaics (solar electricity), and low-flow toilets.
Property owners can take advantage of financing through CaliforniaFIRST after their local government joins the Program.
A pilot stage of the CaliforniaFIRST Program will roll out in a limited number of counties and cities beginning in summer 2010.  Counties and cities are currently approving resolutions to join the Program as part of their public process.  As counties and cities formally opt into the Program, we will provide additional information on areas serviced by the Program.  Check out the News section of our website for press releases on locally adopted programs. We will post a complete list of CaliforniaFIRST counties and cities on this page as soon as the adoption period is complete.
The pilot stage of the CaliforniaFIRST Program is set to launch in early summer 2010.  Applications are not currently being accepted.  Once the Program is launched, a property owner will be able to access an on-line web portal to:
  • Investigate energy and water improvements that are right for their property
  • Calculate the annual assessment payment and associated energy and water cost savings
  • Find eligible contractors
  • Research additional local programs that provide incentives and education on energy and water efficiency
  • Apply for financing
The following is a list of counties that have passed the resolution to join CaliforniaFIRST. Click on the county link for a list of participating cities within that county:


More: http://www.renewfund.com/node/223

Maryland aims for 100,000 solar rooftops in 10 years


Today, a bunch of legislators and business people plan to show their support for three solar related bills being considered by the General Assembly by gathering in a state office building and explaining how they will make it easier to use solar power, how they will create jobs and how they will lessen dependence on fossil fuels, according to Environment Maryland and the Maryland Energy Administration.
Environment Maryland says a quarter of Maryland homes are ready for solar panels that could capture energy that is now going unused. The group cites information from the International Center for Sustainable Development that shows the state gets about 196,000 gigawatt-hours of solar energy on a sunny summer day. That's more than what's produced at the state's mostly coal-fired power plants here in a year.
The move could reduce greenhouse gases and air pollution, as well as make energy distribution more efficient by creating it locally. It could also save consumers money and create local jobs, the group said.
Environment Maryland describes the three bills this way:
First, Gov. O’Malley has introduced legislation that would require a quicker ramp-up of the solar portion of the state’s renewable portfolio standard. This would mean that utilities would have to get a greater percentage of their energy portfolio from solar power sooner, which would jumpstart job creation and cut down on our emission of greenhouse gases.
Second, Del. Hecht and Sen. Middleton are leading an effort to introduce legislation that would give municipalities the means by which to loan people money for solar and other clean energy projects at very low interest rates, resulting in more homeowners taking advantage of the clean, reliable electricity that solar energy generation provides.
Finally, Dels. Pinsky and Hecht are working on "net-metering" legislation, which would require utilities to pay customers back for surplus energy they create with the solar panels on their roofs.
The state and federal government already do offer incentives for people to get panels as well as make other energy saving upgrades. Anyone of you have panels now? Anyone think they'll get them? Will these bills help?

Thursday, February 18, 2010

2010 Ford Transit Connect Officially First Ford Electric Vehicle



Along with the 2010 Ford Transit Connect, Ford has formally announced the Transit Connectwill indeed be the battery electric van announced in December. Many an interesting detail ahead.
The Transit Connect represents a new entry into a vacant commercial market in the US, and as such Ford is planning on entering with both barrels blazing. Aside from the standard gas engine Transit Connect, Ford is planning to introduce two varieties of all-electric Transit available in the second half of 2010. Since most commercial market buyers know the daily range of their vehicles they'll be able to buy for their targeted range, the entry level version will come with a 60 mile lithium ion battery and the buyer can opt for a 100 mile if their application calls for it. The commercial entry for EV makes a lot of sense when you consider the vehicles will be under the most severe duty cycles as well as closely monitored by fleet operators, it makes collecting field data an engineers dream.
As noteworthy as the actual van is, the production method merits a mention as well. The rolling chassis and interior will be assembled right next to the regular Transit Connect, but at the point where the powertrain is set for installation, the BEV Transit Connect will get nothing. The unfinished vehicle then gets shipped to its destination port, where it will be delivered to longtime EV outfitter Smith Electric Vehicles, who will install the batteries, power control module, and 50 KW drive unit, as well as wrap up the final assembly elements. Then it's back on the truck for delivery to the local dealer.
The idea of an electric Transit Connect is interesting, but it's only a part of Ford's electric and hybrid strategy going forward. They've also announced an electric small car for 2011, the Ford version of the next-generation hybrid in 2012 and a plug-in hybrid for 2012. This seemingly aggressive timing reflects the last few years of non-stop work on electrification coming to fruition. Considering that timing on the small car, we wouldn't be shocked (heh) to see either the Ford Fiesta or the next generation C1 global platform Ford Focus hitting dealers in electric form.
We often malign electric vehicles, but it's due primarily to the wild-eyed claims from startups with some neat sketches and venture capital money. Now that Ford is giving us dates and vehicles, we're intrigued. Nothing will ever replace a cammed-out V8 or a frantically turbocharged inline four, but we'd be lying if we said we aren't at least curious. Complete details below:

Monday, February 15, 2010

More on Bill for Federal Solar Rebates

Published Feb. 5, 2010

A bill proposed in Congress last week would aim to install solar photovoltaic systems on millions of roofs across the country over the next decade.

Introduced by Sen. Bernie Sanders, I-Vt., and Rep. Steve Cohen, D- Tenn., the measure would offer rebates to cover up to half the cost of 10 million new solar arrays and 200,000 solar water-heating systems.

The goal would be to install up to 30,000 megawatts of new solar-electric production capacity, a total about 50 percent higher than the extremely ambitious solar plans that have been announced in China and India in recent months.

The rebate amount for solar PV systems would start at $1.75 per watt in 2010 and decline periodically until reaching 50 cents per watt in 2018 and 2019.

The "10 Million Solar Roofs and 10 Million Gallons of Solar Water-Heating Act of 2010" is modeled on California's "Million Solar Roofs" initiative and a solar program in New Jersey.

Many states and utilities already provide incentives that, combined with the 30 percent federal Investment Tax Credit, may cover a significant proportion of the cost of a solar array. These incentives have generally been declining over time. Some states and utility programs have run out of money to fund them because of high demand.

The rebates provided by the bill would be offered on top of existing federal, state and local incentives. Total incentives could not exceed 50 percent of a system's cost, under the measure.

Industry executives praised the proposal.

"Passing this bill would create the world's largest market for solar energy here in the U.S. and bring with it tens of thousands of manufacturing and installation jobs in all 50 states," said Rhone Resch, president and CEO of the Solar Energy Industries Association, a trade group. "This bill will help lift the U.S. economy at a time when we need it most."

Jeff Wolfe, co-founder and CEO of the Vermont-based solar company groSolar, said the bill would "help make America energy-independent while creating many thousands of good-paying jobs," according to a news release published by the solar trade association.

Mr. Cohen, who introduced the bill in the House of Representatives, represents the city of Memphis, where a solar manufacturing plant operated by Sharp Solar has been expanding its production.

"Sharp commends Sen. Sanders and Rep. Cohen for sponsoring this new legislation, which will foster the growth of the U.S. residential solar market," said Ron Kenedi, vice president of Sharp Solar, according to the news release.

SF Pace Program - Property Assessment Financing

San Francisco, CA — San Francisco has established the nation’s largest green financing program to allow businesses and homeowners to pay for efficiency, water conservation and renewable energy improvements through future property taxes.
The Property Assessed Clean Energy (PACE) program will make $150 million in bonding capacity available to the city’s property owners beginning March 1.
The low-cost loans, which are paid back through property taxes over their lifetime, typically within 20 years, are attached to the property, not the property owner. Eligible property owners will have paid their property taxes on time for the previous three years.
An Oakland-based company called Renewable Funding will administer and provide capital for the program. Its president, Cisco DeVries, developed the PACE financing program in nearby Berkeley while working as the mayor’s chief of staff.
PACE programs have been hailed as a way for property owners to avoid the barrier of high upfront costs. More than a dozen states now have PACE programs in place, while Renewable Funding said it is currently developing additional programs for more than 100 communities in several states.
“In signing this legislation, Mayor (Gavin) Newsom has put the final piece in place to allow tens of thousands of San Francisco property owners to have the opportunity to reduce their water and energy footprint, all while creating local green jobs,” DeVries said in a statement this week.
The news comes less than a week after Newsom announced $19.2 million in funds for energy efficiency projects through the city’s Energy Watch program and the American Recovery and Reinvestment Act.
The money will be used for free on-site assessments, installations of energy efficient equipment and lighting, and retrofits of municipal buildings, such as the Ella Hutch Center and Southeast Health Center.

Sunday, February 14, 2010

Franchise Your Business in 7 Steps


By Carol Tice   |   February 12, 2010
Franchising your business is a proven route to rapid growth. But becoming a franchisor is not an automatic ticket to success, especially in this challenging economy. In January, for instance, three established franchisors filed for bankruptcy protection: Taco Del Mar Franchising Corp., Uno Restaurant Holdings Corp., and Daphne's Greek CafĂ©.

Still, many business owners dream of seeing their brand become a household name, with a network of franchisees from coast to coast or around the globe. When the right concept is franchised effectively, it can be a great expansion strategy that doesn't require as much up-front capital as growing through company-owned units.

If you're considering franchising your business, know that the process of becoming a franchisor is usually long and involves considerable cost. Just because you qualify to sell franchises doesn't mean you will find buyers. Data from the International Franchise Association shows that of the 105 companies that started selling franchises in 2008, more than 40 had not reported the sale of their first unit by the end of 2009.

Becoming a successful new franchisor entails making many thoughtful decisions early on that will affect your business for years to come. There's also a lot of legal paperwork to wade through to make sure your business complies with federal and state laws that regulate the franchise industry.

Here's our guide to the important steps you'll need to take along the road to becoming a new franchisor.

Step One: Evaluate if Your Business is Ready
The first question to ask is whether your business is suited to being franchised. Beyond having a track record of sales and profitability at the existing business, there's several factors to weigh here, says Mark Siebert, CEO of the national franchise-consulting firm iFranchise Group.
  • Consider your concept. Most good franchise concepts, he says, offer something familiar, but with some unique twist to it. A good example is Florida-based Pizza Fusion which offers a familiar product--pizza--but with all-organic ingredients, delivered in hybrid-electric cars.

    The concept has to appeal both to end consumers and to prospective franchisees. There should be an expectation that more units will create economies of scale and increase profits. Additionally, the business needsto be something you can systematize and replicate, not something that needs your personal touch to be successful.

    "Ask youself, is the concept salable?" he says. "Can you clone it? Does it provide good returns?
  • Check your financials. Most successful franchises take a business that's already profitable and try to replicate that success in other locales. Cleveland-based franchise consultant Joel Libava says he likes to see companies with at least a couple of profitable units beyond the first one already in operation before a company tries franchising.

    "Is it just one great restaurant and mama's wonderful pizza sauce?" Sibert asks. "Or did you keep growing?"
  • Gather market research. Don't rely on your gut feeling that your business would be a smash hit across the country. Gather market research to confirm there is widespread consumer demand beyond your home city for what your franchise would offer, and room in the marketplace for a new competitor.
  • Prepare for change. Becoming a franchisor means you'll be engaged in entirely different activities than you were as a business owner. You'll primarily be selling franchises and supporting franchisees now, instead of selling pizza or fixing toilets.

    "Ask yourself if you're comfortable having a role as a teacher and salesperson, selling and supporting franchisees," Siebert says, "as opposed to going out there and doing it yourself."

    In addition, franchising your business will require that you relinquish some of the control you've had over how your concept is executed.

    "Franchisees won't do it exactly the way you would, even if they do it well," says IFA president Matthew Shay. "If you are so married to your concept that you won't let anyone else touch it, then franchising may not be right for you."
  • Evaluate other alternatives. Before you plunge into franchising, you may want to consider other options, Siebert says. Depending on your situation slower growth, finding debt financing or taking on partners are all alternatives that may prove better ways to move forward.

    It also can cost $100,000 or more, so ask yourself if your company has the financial resources. Remember that while franchising allows you to grow fast, it also means giving up most of the franchise units' future profits, Shay says.
Step Two: Learn the Legal Requirements
In order to legally sell franchises anywhere in the United States, your business must complete and successfully register a Franchise Disclosure Document with the Federal Trade Commission. In the FDD, you'll be asked to provide a wide range of information about your business, including audited financial statements, an operating manual for franchisees, and descriptions of the management team's business experience.

Beyond the federal FDD requirements, some states have their own rules for selling franchises within their borders. California and Illinois are generally regarded as having the most daunting registration process, says Libava. If you want to sell in one of these states, you'll need to meet their requirements as well, at additional cost.

Franchisor Cindy Deuser, 51, co-founder of five-year-old franchisor Lillians Shoppes, says the rule binder her home state of Minnesota provided was a two inches thick. It took the bargain-fashion-accessory company a full year and cost more than $100,000 to qualify in 45 of the 50 states, she reports.

"It took longer than we thought, and was very intense in terms of all the things you have to cover," she says.

To advise and assist in this process, consultant Libava recommend hiring an experienced franchise consultant or franchise attorney. Often, a new company will be set up to act as the franchisor. Find an expert who can make sure you're doing every required step correctly.

Step Three: Make Important Decisions About Your Model
As you prepare your legal paperwork, you'll need to make many decisions about how you'll operate as a franchisor. Key points include:
  • The franchise fee and royalty percentage 
  • The term of your franchise agreement
  • The size territory you will award each franchisee
  • What geographic area you are willing to offer franchises within
  • The type and length of training program you will offer
  • Whether franchisees must buy products or equipment from your company
  • The business experience and net worth franchisees need
  • How you will market the franchises
  • Whether you want an owner-operator for each unit or area/master franchisees who will develop multiple units
New franchisors don't realize how much each of these decisions can affect their future profitability, says Siebert.

"If you're thinking either 5 percent or 6 percent royalty, for instance, the difference doesn't sound big," he notes. "But five years later, when you have 100 franchises sold, and they each make $700,000 a year, that's a $7 million annual mistake. And you've signed a 10-year contract."

Lillians' Deuser says she and her sister/partner Sue Olmscheid, 45, ran many business-model scenarios with their franchise attorney before settling on their $25,000 franchise fee, 7-1/2 percent royalty and 10-year contract term. They seem to have hit a winning formula--Lillians has grown to 32 shops in its first two years as a franchisor with its unique concept, in which stores are only open a few days a month.

Be careful to note whether geographic variables such as weather or local laws may affect franchisees' success. Territory size is important too, as too-large territories may have to be bought back later at a premium so they can be split up, notes IFA's Shay.

In the case of San Francisco Bay-area solar-panel installation franchisor Solar Universe, the company is selling franchises in concentric circles moving outward from its headquarters, mostly in warm-weather states with high electricity costs and generous state green-energy rebates, says founder Joe Bono, 36. Solar Universe has sold 14 territories since qualifying as a franchisor in January 2008.

Inadequate training can leave your franchisees ill-equipped to implement your system successfully. Solar Universe spent nearly $1 million preparing to franchise, Bono says, including $150,000 to create a state-of-the-art training center for franchisees complete with indoor roofs where they can practice installations.

Step Four: Create Needed Paperwork and Register as a Franchisor
Once you've made the important decisions that shape how your franchise will operate, you're ready to complete your legal paperwork. When you submit it, be prepared for authorities to critique the document and possibly demand additional disclosures before they approve your application.

While the FTC essentially just files your FDD away, you'll need to wait state approval. Bono reports Solar Universe waited several months to receive comments back from the state of California on its filing, and it took four months in all to get approved there.

Step Five: Make Key Hires
As you prepare to become a franchisor, you'll usually need to add several staff members who will focus solely on helping franchisees. In the case of Solar Universe, the company sells its franchisees the solar panels they use, so founder Bono says he needed a full-time hire to staff the order desk. The company also hired a trainer and a full-time "franchise advocate" to answer franchisee questions and resolve any problems.

For its part, Lillians Shoppes hired a trainer, a creative director, a marketing assistant and a franchise-process manager who helped get franchisees using company software and systems, says CEO Deuser. Lillians now has a full-time staff of seven. The founding sisters still do all the buying for the growing chain, but Deuser says growth means they are already looking into hiring a second trainer.

Step Six: Sell Franchises
Now that you're in business as a franchisor, one of your most pressing activities will be to find franchisees and convince them to buy your concept. Lillians is unusual in that the company has sold all its franchises by word of mouth and doesn't have a sales representative. To help stimulate interest, the company offers a $1,000 referral fee to anyone who sends the company a new franchisee.

At Solar Universe, Bono says they've hired two in-house salespeople to handle franchise marketing. The company has also entered into a partnership with the national franchise-consulting chain FranNet, whose consultants may present the company to their prospects. Other common sales techniques include attending franchise fairs or hiring independent franchise marketing firms to help locate investors.

Selling franchises is difficult because of the high risk involved for franchisees, notes Siebert. Your salespeople should know your business well and be able to tell a compelling story about why you're a worth the investment of their time and money.

Siebert boils down the issue this way: "You're saying, 'I want you to give me allyour money. Then, quit your job, give up your security and benefits, and go into a business you've never been in before. And follow my rules.' You'll need to establish a pretty high level of trust."
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Step Seven: Support Franchisees
As a franchisor, you'll have gone through a lot to reach this point. But here – at the point where you begin supporting your franchisee network – is where a chain ultimately succeeds or fails. Your training programs and other support efforts will create quality control, notes Siebert, making sure the brand provides a uniform experience no matter which unit customers visit. With the Internet, this has increasingly come to mean providing ongoing online learning modules for franchisees to use.

"If you're a restaurant operator and employ 20 people in a unit," he notes, "you have thousands of new employees going through the system every year. Without ongoing training, it's pretty easy to institutionalize wrong behaviors."

At the same time, you'll need to start marketing the growing chain to drive sales to franchisees. Many new franchisors underestimate how much this marketing and support effort will cost, says consultant Libava. Marketing encompasses everything from radio or print ads to uniforms, logos, fliers, and logo art on company vans.

"Trust that you're going to need a lot of money for marketing," he says.

More: http://www.entrepreneur.com/franchises/franchisezone/howto/article204998.html

Tuesday, February 9, 2010

10m Roof Solar Legislation


Sen. Sanders Introduces 10 Million Solar Home Initiative

Washington, D.C., United States [RenewableEnergyWorld.com]
Sen. Bernie Sanders (I-VT), chairman of the Senate's green jobs subcommittee introduced legislation with nine cosponsors to encourage the installation of 10 million solar systems on the rooftops of homes and businesses over the next decade.
Sanders said a recent report shows that solar power could help make every state more energy independent if solar units were installed on available rooftop space, because every state can meet 10 percent or more of its electricity needs just through rooftop solar.
Sanders' bill, the 10 Million Solar Roofs and 10 Million Gallons of Solar Water Heating Act of 2010, would authorize rebates which, along with other incentives, would cover up to half the cost of the 10 million solar power systems and 200,000 water heating systems. Non-profit groups and state and local governments also would be eligible.

"At a time when we spend $350 billion importing oil from Saudi Arabia and other countries every year, the United States must move away from foreign oil to energy independence," Sanders said. "A dramatic expansion of solar power is a clean and economical way to help break our dependence on foreign oil, reduce greenhouse gas emissions that cause global warming, improve our geopolitical position, and create good-paying green jobs."

At a Senate committee hearing, Sanders questioned Energy Secretary Steven Chu about President Obama's budget for next year. The White House requested US $2.4 billion for energy efficiency and renewable energy programs. The requested 5 percent boost overall included a 22 percent increase for solar power.

The potential for solar power also was the subject of testimony last week before Sanders' green jobs subcommittee by Jeff Wolfe, chief executive officer of groSolar. Wolfe said Sanders' bill "would help homeowners and small businesses stabilize their energy costs."
Sanders said a recent report shows that solar power could help make every state more energy independent if solar units were installed on available rooftop space, because every state can meet 10 percent or more of its electricity needs just through rooftop solar. Moreover, because solar energy creates more jobs per megawatt than other energy sources. Sanders' bill could create hundreds of thousands of jobs over the next ten years in the solar industry.
The Solar Energy Industries Association (SEIA) applauded Sanders and Rep. Steve Cohen (D-TN) for introducing the bill.

“Senator Sanders and Congressman Cohen have shown true leadership by setting a bold vision for solar installations that will help the U.S. reclaim global leadership in this fast growing industry,” said SEIA President and CEO Rhone Resch. “Passing this bill would create the world’s largest market for solar energy here in the U.S. and bring with it tens of thousands of manufacturing and installation jobs in all 50 states.”
Reaction from other players in the solar industry was also positive. Sharp Solar said that it would help boost both the manufacturing and integration sectors.
“Sharp commends Senator Saunders and Representative Cohen for sponsoring this new legislation which will foster the growth of the U.S. residential solar market,” said Ron Kenedi, vice president of Sharp Solar. “We are pleased to see Congressman Cohen and the State of Tennessee, where we manufacture our solar modules, lead this effort. Legislation such as this will help make our nation’s energy portfolio more sustainable, create green jobs and help combat climate change, while helping secure energy independence.”

The legislation's cosponsors include Environment and Public Works Committee Chairman Barbara Boxer (D-CA) and Sens. Patrick Leahy (D-VT), Frank Lautenberg (D-NJ),  Robert Menendez (D-NJ), Sheldon Whitehouse (D-RI), Ben Cardin (D-MD), Jeff Merkley (D-OR), Kirsten Gillibrand (D-NY) and Sen. Arlen Specter (D-PA).

“This bill will help make America energy independent while creating many thousands of good paying jobs in the U.S. It will also help bring long term relief to American homeowners, who otherwise face mounting energy bills. This bill represents a rare legislative opportunity for a win-win-win, and we salute Senator Sanders and Representative Cohen for introducing it,” Wolfe said.

Monday, February 8, 2010

PG&E customers feel sticker shock from rising rates


If a household's power use rises above that allowance, a higher rate applies for every kWh over the threshold. Prices rise incrementally as the amount of power used crosses into each additional tier.
PG&E's baseline rate is comparable to -- even a little less than -- baseline rates charged by Southern California Edison, another investor-owned company, or the Los Angeles Department of Water and Power, the municipal utility that serves much of metropolitan L.A.
In the Valley, PG&E's charge for 1,000 kWh -- about what the U.S. Department of Energy says an "average" home uses in a month -- is about $177 in Stockton and $168 in Fresno. Southern California Edison charges about $161 for the same amount of power in Bakersfield. In Pasadena, served by LADWP, the cost is about $135.
Elsewhere in the Southwest, the cost for 1,000 kWh is about $98 in Tucson, Ariz., and $129 in Las Vegas.
But customers with larger homes to cool, or swimming-pool pumps to run, can easily find themselves reaching into PG&E's three higher-rate tiers, where the price per kWh can be 12% to 38% higher than Edison's.
"Tiered rates are designed to reward conservation," said Mindy Spatt, a spokeswoman for The Utility Reform Network, or TURN, a consumer advocacy group.
But because the baseline and lower tiers are protected from dramatic rate increases, "when you look at how much higher PG&E's tiers are, all of the rate hikes have gone to the top tiers," Spatt said.
At its highest residential tier, PG&E charges 47.39 cents for a kilowatt-hour.
That's more than Southern California Edison, where the top rate is 34.25 cents; San Diego Gas & Electric, with a top tier of 20.2 cents; or the Sacramento Municipal Utility District, where the highest rate is 17.02 cents.
The differences are even more striking when compared to the highest rates charged in other southwestern states: 15.21 cents in Albuquerque, N.M., 12.1 cents in Las Vegas, Nev., or 11.47 cents in Austin, Texas.
There are plenty of factors that play into the rates, said PG&E spokesman David Eisenhauer. And when it makes its case to the California Public Utilities Commission for approval of its rates, the utility is entitled to recover its costs of doing business: fuel to generate the electricity, sending the juice out over transmission lines, maintaining wires and poles -- and a "fair return" for the company's shareholders.
"It's the pipes, poles and wires, and the cost of the actual commodity itself," Eisenhauer said. "We apply to the PUC and tell them how much money we need to run our business, and once that's determined, we distribute that based on the rate structure approved by the commission."
But such costs aren't unique to PG&E. Other utilities have to buy electricity or the fuel to produce it, and they have to maintain their distribution lines and other infrastructure, too. So why is PG&E's top tier so much higher than anyone else's?
Eisenhauer's explanation: PG&E's baseline allowances are higher than other California utilities.
How do electricity rates stack up?

View How do electricity rates stack up? in a larger map
"That results in more customers at a protected level," he said -- and it means increases can only be distributed among the upper levels.
In its last general rate increase in 2007, PG&E opted to design its rates to load the increases more heavily on the top two tiers, Eisenhauer said, while other utilities chose to spread the increases more evenly.
Feeling the sting
Spatt offers a different explanation for the rate discrepancy: PG&E's billion-dollar bottom line.
In its most recent financial statement, the utility's parent company, PG&E Corp., reported total profits of about $957 million through the first nine months of 2009.
"I don't know if it's greed or if it's overreaching. ... Maybe it's because they have a guaranteed rate of return," Spatt said. "But it's an extremely top-heavy utility with exorbitant salaries and huge lobbying and marketing expenses."
Amid the jumble of baselines, rate tiers, cost factors and profit margins, there's no precise answer to what it all means to an "average" power bill.
The U.S. Department of Energy estimates a typical American household will use about 11,000 kWh of electricity in a year, or about 916 kWh in a month. But that doesn't take into account geographical differences or seasonal swings in demand.
And other variables affect a home's energy use and its power bill -- the size of the home, whether there's a swimming pool or spa, the age and efficiency of appliances, and how vigilant the residents are about conservation.
But Spatt isn't convinced that any of those variables justify what PG&E charges at its top tiers -- or the extra $1.7 billion the would be generated in three years by a rate increase the utility is seeking from the PUC.
"TURN is going to review every single word of that document, and we're going to challenge everything we think is unnecessary, that is padding, that is overreaching," she said. "Ultimately, the problem is that PG&E keeps raising the rates, and the PUC keeps letting them do it."