Explanations, Solutions Sought on Several Sides

Why are SDG&E;’s electricity rates higher than those of Southern California Edison and Pacific Gas and Electric? The state Public Utilities Commission’s Division of Ratepayer Advocates hopes to provide an answer in August when it completes a study of rates charged by the three utilities.

But as with most PUC proceedings involving San Diego Gas & Electric Co., the rates study will be hotly contested. The DRA wants the survey to cover the past 10 years, but SDG&E; favors a two-year survey, which probably would favor the utility.

Meanwhile, SDG&E; Chairman Tom Page is betting that “in a couple of years” the utility will no longer have the state’s highest electricity rates.

Must Trim Expenses

To further reduce its rates, it must trim operating and maintenance expenses that account for 60% of its budget and reduce fuel bills that account for the rest.

Page said the utility is making progress. It will have 4,500 employees at the end of 1988, down from 5,000 in mid-1986. It expects to reduce fuel costs through its role as a “power broker,” he said.

SDG&E; executives and employees are “working harder and working smarter,” Page said. “We’re totally dedicated to the success of this enterprise.”

Serious Doubts

Michael Shames, executive director of the Utility Consumer Action Network, argues that lower rates will come about only if SDG&E; substantially cuts its payroll, pays serious attention to energy conservation, and agrees to work more closely with commercial and industrial customers who increasingly view co-generation plants as cost-efficient sources of power.

Gary Estes, a San Marcos business executive who last year led a successful revolt against a proposed industrial and commercial rate hike, has serious doubts about SDG&E;’s ability to reduce rates.

But he believes the utility should at the least learn to be less confrontational.

“They think that just because they’re the utility, they know better than their customers,” Estes said.

Another Complaint

In that vein, another businessman has lodged a complaint over SDG&E;’s internal communications. The businessman suggests that last year’s industrial and commercial customer revolt occurred largely because SDG&E;’s pricing and marketing staffs failed to discuss a potentially explosive rate increase.

Henry Morse, SDG&E;’s manager of major accounts, declined to discuss the claim but noted that “the pricing department is now a part of the marketing division, and it didn’t used to be.”

The consolidation took place in June, according to Morse, after SDG&E; realized that “we needed to start paying an awful lot more attention to our major customers.”

Serving the Public

“The fact is, SDG&E; is probably serving the public better than they did in the worst days of the energy crisis,” according to Richard Hertzberg, a San Diego businessman who was unsuccessful during an attempt last year to acquire SDG&E;’s small but unprofitable downtown steam loop. “Based on what I’ve heard, they’ve made significant inroads in their efforts to lower their costs.”

But given problems that accumulated at the utility during the 1970s and early 1980s, “it’s like they’re trying to make a silk purse out of a sow’s ear,” Hertzberg said. “Page will never have a well-loved company, because utility companies never are loved.”