SDG&E;’s Big-User Plan Assailed by Large, Small
The electricity rate design that San Diego Gas & Electric will propose to state regulators Friday is enough to cause nightmares for Jesse Morphew, energy manager for the San Diego Unified School District.
The design would boost the school system’s $6-million annual gas-and-electric bill by about $1.2 million, even though electricity usage at the system’s 160 sites would remain constant.
SDG&E;’s proposed industrial and commercial electricity rate overhaul would cause a minor increase in electricity bills when school is in session, but “we’re going to get killed during the summer months, the Christmas and Easter vacations, when we shut down our plant,” Morphew said.
‘Clearer Reflection’
The proposed “cost-based rate” schedule “is going to give our customers a clearer reflection of what it costs for (SDG&E;) to produce the energy they use,” according to Doug Hansen, SDG&E;’s manager of pricing.
That clearer picture probably will mean higher electricity bills for about 200 of the utility’s 400 largest customers. However, bills will be reduced for the remaining 200 large customers, according to SDG&E.;
The utility wants to reduce electricity rates for its larger customers but assess customers a flat monthly fee that would be based on the customer’s maximum potential demand for electricity. SDG&E; believes the hefty monthly fee is the best way to ensure that individual customers pay their fair share of the utility’s generating costs.
But the flat, monthly fee means that the school system--which is shut for 2 1/2 months of each year--would be “charged the same thing whether we use electricity or not,” Morphew said. “There’s going to be no incentive to (conserve).”
Other Plans Due
SDG&E; plans to submit similar “cost-based rate” proposals for other classes of customers--including smaller commercial customers and residential customers.
Not surprisingly, the large-user package has drawn protests from the City of San Diego, the Utility Consumers Action Network, a local chapter of the California Assn. of Manufacturers, and a San Diego-based trade association that includes manufacturers of co-generation devices.
“This may well be the first time in recent history that all three classes of ratepayers have united to oppose SDG&E;,” according to UCAN Executive Director Michael Shames.
That chorus of protest arose at a time when SDG&E; and the Public Utilities Commission are in the midst of a pair of hearings that probably will affect electricity rates in the county.
SDG&E; has asked the PUC to reverse an earlier decision that prohibited the utility from making customers pay for $69 million in construction cost overruns at San Onofre Nuclear Generating Station Units 2 and 3.
$20 Million Sought
Utility managers last week acknowledged that the PUC probably will not rehear arguments covering $49 million of those disputed construction costs. However, SDG&E; still hopes to persuade the PUC to have customers pay for $20 million of that bill.
SDG&E; also is pressing commissioners to ignore a recent staff report that recommends that SDG&E; pay a $101.6-million penalty for importing excessively expensive electricity on the Southwest Powerlink transmission line.
The report suggested that SDG&E; shareholders--rather than its customers--pay the $101.6 million because management “imprudently managed” contracts with Public Service Co. of New Mexico, Tucson Electric Power and the Alamito Co., according to William F. Dietrich, a senior economist with the PUC’s Public Staff Division, the group that represents the public in utility rate cases.
The commission’s review of SDG&E;’s Southwest Powerlink contracts could have far-ranging effects on SDG&E;, which has been buying about half of its electricity from out-of-state utilities.
UCAN’s Shames described the Southwest Powerlink review as the commission’s “chance to investigate and instruct SDG&E; on how it should perform, as long as (the utility) sees itself as a power broker.
“SDG&E; (could) find out what the PUC thinks is a good contract or a bad contract, and what it needs to do as far as administering its contracts.”
New Line Considered
In a related development Monday, SDG&E; announced that it will join Southern California Edison, Pacific Gas & Electric and some smaller municipal utilities in an effort to build a 500-kilovolt transmission line from the Pacific Northwest to the San Francisco Bay Area.
SDG&E; would invest $18 million in the line, which would give SDG&E; the ability to import 47 more megawatts from utilities in the Northwest.
SDG&E;, PG&E; and Edison must receive PUC approval to invest in the new line.
SDG&E; has space on existing transmission lines for 260 megawatts, but “our share of that line is loaded quite a bit of the time,” according to Bob Resley, manager of electricity contracts for SDG&E.;
