$4-Million Slash in Operating Costs Is Reported by SDG
In an overlooked but seemingly successful campaign, San Diego Gas & Electric has slashed operating costs by $4 million across the board in all 12 company divisions this year.
And the cuts will continue, with 2% company-wide slashings due in 1986, according to Ron Watkins, vice president of administrative services.
The cuts, while not tremendously dramatic when measured against SDG&E;’s 1985 estimated operating expenses of about $326 million, represent management’s attempt to trim what it perceives as corporate fat at the 5,000-employee utility.
The cutbacks involve small-scale reductions in departmental expenses and, for the most part, “will be pretty transparent to the public, except in rates,” said Watkins. Lower operating expenses, he added, will eventually translate into lower energy bills for customers.
But there are other motives: Higher earnings will eventually find their way into SDG&E;’s retained earnings, which will aid the company when and if it becomes a holding company, capable of venturing into unregulated, non-utility enterprises. That proposal is pending before the state Public Utilities Commission.
Watkins also serves as chairman of SDG&E;’s Sunset Review Committee, a 1-year-old, nine-member group that analyzes the budgets of four of the utility’s 12 divisions each year. This year, the operating budgets and structures of SDG&E;’s public relations, customer service, governmental affairs and personnel divisions were analyzed by the committee.
Keeping costs down has also kept SDG&E;’s worker-to-customer ratio low--so low, in fact, that at 3.34 employees per 1,000 customers, it is the lowest of the nation’s 25 largest combined gas and electric utilities.
The highest is a ratio of 7.96 at Gulf States Utilities in Beaumont, Tex., where SDG&E; Chairman, President and Chief Executive Thomas Page worked before joining SDG&E; in 1978.
SDG&E; has reduced its work force by more than 300 people in the last three years, but the cuts have been from attrition and not layoffs, Watkins said.
The Energy Notes newsletter, mailed with utility bills and containing energy-saving tips, recipes, new billing information and general SDG&E; news, was reduced from four to two pages in January. Interestingly, “no one noticed” the change, according to John Pruyn, SDG&E; employee communications supervisor.
The newsletter, paid for by shareholders, was resurrected in 1979 after a five-year hiatus. Its name was changed from Light Lines to Energy Notes in 1983.
“We’re not really missing anything” in terms of content with the new format, said Pruyn, “We just tightened things up, and we’re writing shorter.”
SDG&E; employees will also notice a change in the utility’s communications and public relations division.
Its internal publications have been drastically altered, as the monthly 16- to 20-page tabloid newspaper News Meter has been given a termination notice. It will be replaced by a weekly, pamphlet-style newsletter called Update, beginning Jan. 1. In addition, the company will start a slick, 16- to 20-page quarterly magazine, called News Meter Quarterly, that will publish employee comings and goings, such as promotions, retirements and personal items.
The internal publications are paid for by customers, not shareholders.
Pruyn said the company has trimmed the cost of its monthly newsletter to customers by $5,000 per month to $10,000, and the internal publications budget next year will be $67,000, down 11% from this year’s expenses.
