Citing Outcry, SDG&E; Wants to Kill Its $4.80 ‘Customer Service Charge’

San Diego Gas & Electric surprised state regulators Monday with a request to eliminate a $4.80-a-month “customer service charge” that has drawn the wrath of many San Diegans since its introduction in January.

SDG&E; made the request because customers have expressed “an unparalleled amount of anger and frustration” over the charge, said William Reed, SDG&E;’s regulatory affairs manager.

The utility still maintains that 85% of its residential customers actually enjoyed lower bills because of the monthly fee. But executives found that they could not “sit back and ignore” the public uproar because few customers understood how the fee affected their bills, Reed said.

“I’ve never seen this degree of concern by a public utility as far as its rates are concerned,” Michael Shames, executive director of Utility Consumers Action Network, said Monday. Shames, whose organization led opposition to the $4.80 fee, suggested that SDG&E; volunteered to kill the fee because it “was looking at consumer revolt in the making.”

SDG&E; does not expect to “re-present” the fee any time soon, Reed said. “Based on the surveys we’ve done, and the customer reaction we’ve received, there is considerable misunderstanding of what’s going on.”

The fee was introduced in January as part of a gradual move toward what SDG&E; described as a more equitable pricing structure. The fee was supposed to cover fixed costs that do not vary from customer to customer.

At the same time that the Public Utilities Commission approved the $4.80 fee, SDG&E; lowered the first level of its two-tiered, per-hour kilowatt charge from about 9 cents to 6 cents. According to brochures mailed to SDG&E; customers, the 3-cent reduction would generate lower bills for most residential customers--even with the $4.80 charge.

However, the monthly fee did “raise costs to one group that can least afford it--the elderly customers with low income,” who use relatively little electricity, SDG&E; Pricing Manager Doug Hansen acknowledged Monday. “Raising costs to this group was never our intention.”

SDG&E; made its surprise announcement during a hearing before the state PUC. It will be at least a month, however, before the charge disappears from bills. That’s because the fee proposal is tied to a complex rate review being conducted by the PUC. As part of that review, SDG&E; and the PUC’s staff recently agreed that SDG&E; should reduce its electricity rates by $30 million, beginning Jan. 1, 1989.

SDG&E; on Monday suggested that the $30-million rate reduction and the death of the $4.80 fee occur “immediately,” because reducing residential rates for electricity “is one of the company’s top objectives,” Hansen said. But it will be at least several weeks before the full PUC can review that proposal.

Although proposing to end the $4.80 fee, SDG&E; asked commissioners to increase the utility’s first-level kilowatt charge from 6 cents an hour to about 7 cents an hour.

If the $4.80 fee is eliminated and the $30-million reduction is phased in, the typical monthly bill (based on the use of 400 kilowatt hours of electricity and 40 therms of natural gas) would fall from $62.18 to $59.52.