EDITORIAL: State PUC should approve business incentive discount

Proposal would provide 35% PG&E rate cut in Central Valley.

September 25, 2013 

Reacting to chronic high unemployment, cities and counties in the Central Valley are working on business development strategies.

The fate of an important component in these efforts will be decided next Thursday. That is when the state Public Utilities Commission takes up Pacific Gas & Electric Co.'s proposal to offer an Enhanced Economic Development rate discount of 35% to businesses expanding or locating in the Central Valley.

This discount -- much bigger than the Standard Economic Development reduction of 12% previously offered -- would only be available in counties where unemployment is 125% of the state average. And businesses would have to generate at least 200 kilowatts in new energy use to be eligible for the 35% cut for five years.

Approval of the larger discount by the PUC is vital to our region. PG&E rates averaging 13.8 cents per kilowatt/hour are substantially higher than rates in Nevada, Arizona and Oregon. They are double of those in Utah and Washington.

In addition, economists have told Central Valley leaders that they can increase the region's prosperity by adding value to agricultural production with food-processing plants. Economists also see a bright future for water-technology manufacturing. The rub is, these efforts require large amounts of electricity and PG&E's high rates are a barrier to these businesses.

Backers of the Enhanced Economic Development rate would like businesses to receive the 35% discount as soon as they open or expand instead of getting it as a credit at year's end. But neither businesses nor Central Valley leaders should be disappointed if the credit system is approved.

The Enhanced Economic Development rate is supported by Central Valley Democrats and Republicans in the state Legislature, and they are joined by U.S. Sen. Dianne Feinstein.

Clearly, the Standard Economic Development discount of 12% hasn't enabled the Central Valley to fully participate in the national recovery from the Great Recession. Proof of this arrives monthly with the latest unemployment figures.

We urge the PUC commissioners to adopt the Enhanced Economic Development rate and deliver a real tool that will provide more people with work, a paycheck and the opportunity to enhance or restore their pride.

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