SDG&E; Told to Give Back $19 Million to Its Customers

The California Public Utilities Commission, in two separate actions, on Wednesday ordered San Diego Gas & Electric to refund more than $19 million to many of its customers because of overcharges by the utility’s gas suppliers and “imprudent” fuel-oil contracts.

The decisions will translate into at least a $5.25 refund in the January bill for every SDG&E; residential gas customer who lived here in 1981. An additional 35 cents may be refunded in January for SDG&E; residential electricity customers, depending on a final PUC decision later this month.

In addition to the $19-million refund, the PUC has also ordered SDG&E; to prove within 30 days why it shouldn’t be forced to make shareholders--rather than consumers--bear the $11-million cost of renovations on Unit One of the San Onofre Nuclear Generating Station during 1980 and 1981.

The PUC orders regarding SDG&E; came down in a flurry of decisions by the watchdog agency Wednesday. The two actions that have the most immediate impact on San Diegans call for the $19 million in SDG&E; refunds, namely:

- Refunds of $9.2 million resulting from a 9th U.S. Circuit Court of Appeals ruling this spring that found that natural-gas suppliers overcharged SDG&E; during a two-year period beginning in October, 1981. The refunds to customers of SDG&E; during that time period will amount to $5.25 a month and will be paid by companies that supply gas to Southern California Gas Co., the pipeline company that supplies all of SDG&E;’s gas.

- An additional $9.9 million in tentative refunds the PUC ordered because of two “imprudent” fuel contracts. The agency also said SDG&E; could not recover costs for a third fuel contract that the company signed to replace power lost when a fire in 1981 forced a shutdown at San Onofre.

The $9.9-million refund could mean a 35-cent rebate to customers, and a final PUC decision on the matter is scheduled for later this month. SDG&E; officials said the final decision could either nullify the expected 35-cent rebate, or actually increase it.

“The PUC decided that two of the (fuel) contracts we had . . . were not flexible enough,” said SDG&E; spokesman Dave Smith. “They said the contracts resulted in higher costs to our customers than if we had (signed) more flexible contracts.

“The third contract resulted from a July 14, 1981, fire that broke out at San Onofre’s standby generator,” Smith said. “The PUC decided that (SDG&E;’s) fuel replacement cost should be absorbed by SDG&E; because (the PUC ruled that) the fire was avoidable.”

The PUC also ordered SDG&E;, which owns 20% of the three San Onofre nuclear plants, and majority owner Southern California Edison to prove that they acted “prudently” when the two utilities released from legal liability the company that performed the repairs.

In 1981, Southern California Edison and SDG&E; sued Westinghouse, which did the repair work, to recover the renovation costs, according to Henry Morse, SDG&E;’s manager of regulatory affairs. Westinghouse, however, has since produced a letter from Edison, which acted as the contractor, suggesting that Westinghouse was released from any liability, said Morse.

SDG&E; and Edison must now convince PUC members that the release was “prudent,” Morse said. If they fail, the two utilities would have to absorb the $30-million expense. SDG&E; would be responsible for $11 million of that total.