Brian Browne
550 Battery Street #1409
San Francisco, California 94111-2328
September 10, 2002
Joseph P. Grubb
Executive Director
San Francisco Rent Board
25 Van Ness Ave., Suite 320
San Francisco, CA 94102-6033
What are you calculating?
Dear Mr. Crubb,
I recently received a PG&E pass-through for $75.80. This represents a significant portion of my rent. I need to understand how this calculation makes sense.
FYI - I have attached your Section 4.11 Computation of Passthrough of Gas and Electricity (Amended June 17, 1986). Attachment 1. It appears you allow two methods for passing through a power and gas increase? Looking at Attachment 2 - the computations received from my landlord, which method did they use?
My understanding of the Golden Gateway methodology is to subtract a their charges in a base year (1980 in my case) from their charges in the most recent preceding year (2001), divide by the number of rooms in the building and then multiply by the number of rooms in my apartment? I believe this is basically correct. Please feel free to correct me.
My rental rate increase is tied to the Consumer Price Index (CPI). The CPI basket, among other things, contains a weighting for utilities. Does this not mean that I pay twice for power? The electric weight in the National CPI is 2.5%. What is used locally? Also, it does not make sense to subtract a bill paid for in $1980 dollars from a bill paid for in $2001 dollars. It is about as meaningful as subtracting yen from lire. The two amounts should be expressed in constant dollars. Further, as I understand it, different tenants have different initial base years. What is the mathematical and economic logic behind this method? What does it calculate? Length of residency is often correlated with age, which I believe means that this method imposes, with a significant probability, a regressive "tax" on the elderly. People in the sunset of their lives are usually on fixed incomes.
In summary:
- The CPI contains a weighting for electric power
- Rental increases are based on the CPI
- Comparing bills in current v constant dollars is meaningless - like comparing apples and oranges
- Different "base years" makes the calculation even more inconclusive
- Is this methodology a regressive tax on the elderly, long-term tenants?
- What are you calculating?
Please explain what is being calculated by the method used in billing me "Pass-through charges for gas and electricity (Utility Code: 80-1C) - $75.80 ($2002)?
Finally, how was the computation of the interest rate, to be used in calculating the amortization schedule for the seismic pass-through that GGC are proposing, estimated?
I look forward to your prompt response.
Very truly yours,
Brian Browne
PS Also find attached a letter (Attachment 3), which I wrote to management trying to understand this method.