Consumer Group’s Study Calls for SDG&E; Reforms

San Diego Gas & Electric Co. could reduce residential electricity rates by $58 million annually if it revamped purchasing procedures, placed stricter limits on executive expense accounts and trimmed various other operating and maintenance costs, according to a study released Monday by the Utility Consumers Action Network.

SDG&E;’s typical monthly residential electric bill would drop about $4 to $37.86 if the state Public Utilities Commission accepted the San Diego-based consumer group’s recommendations, according to UCAN’s executive director, Michael Shames.

The utility has about 200,000 customers in southern Orange County.

The report described “management and operational deficiencies and inconsistencies within SDG&E;” and criticized the utility for “questionable bidding and procurement practices” and an “unexplained increase” in its number of middle managers.

‘Long on Allegations’

An SDG&E; spokesman Monday called the network’s 327-page report “long on allegations and short on substantiations.”

The report contains “pricing (figures) that we couldn’t figure out,” the spokesman said.

Shames said SDG&E; could trim its costs by millions of dollars each year by correcting “negligent purchasing procedures,” including a consistent practice of unnecessarily limiting contract bidding to one or two bidders.

UCAN’s report suggested that SDG&E; “took lessons from some unscrupulous defense contractors in its calculations for meter installation charges.” The group alleged that SDG&E;’s $120 installation charge could be cut back to from $58 to $72 if the utility had better cost controls.

The report also alleged that spending by executives with company credit cards is “virtually unmonitored.”

One SDG&E; executive has logged $6,870 to $42,104 a year on a company-issued credit card, the report said.

Answers on Expenses Sought

“UCAN would like to know what these executives have been spending,” Shames said. “SDG&E; says it can’t tell us what the charges were for.”

The report also criticized the PUC’s Division of Ratepayer Advocates--which represents the general public in PUC reviews of SDG&E--for; using “sloppy calculations” in a review of SDG&E; rates. The review will determine the level of revenue that SDG&E; will be allowed to collect to recoup its business costs during the next three years.

In March, the PUC’s staff and SDG&E; reached an unprecedented agreement in the review that, if approved by commissioners, would reduce SDG&E;’s revenue stream by about $40 million, or $1.25 a month for the typical residential customer.

Rates could fall even more because the agreement does not cover several other issues being reviewed by the PUC.