SDG&E; Denies Charges of Poor Management

Testifying at state Public Utility Commission hearings Monday in San Diego, representatives of San Diego Gas & Electric denied that the firm had been guilty of “imprudent” management decisions that increased the cost of electricity transmitted on the Southwest Powerlink.

SDG&E; opened the hearings, which could last until the end of the year, by arguing that it had negotiated “significant cost savings” on electricity purchased from utilities in the coal-rich Southwest.

Last month, the PUC’s Public Staff Division, which represents the public during commission hearings, suggested that SDG&E; be penalized $101.6 million for “imprudent” management of contracts with three Southwest utilities.

“The (staff) claims of imprudence are not meritorious,” said SDG&E; attorney James F. Walsh, who described the Southwest Powerlink as “a valuable resource” that has helped the utility better manage swings in oil and natural gas prices.

However, Utilities Consumer Action Network (UCAN) leader Michael Shames argued that the PUC has an “unparalleled opportunity to lower San Diego’s electric rates” by forcing the utility to more closely monitor existing contracts to buy electricity from utilities in the Southwest.

The hearings will continue this morning in the Federal Building on Front Street and will move to the PUC building in San Francisco on Wednesday. The PUC does not expect to issue a ruling on SDG&E;’s performance until late in the year.