Proposed Rate Cut Would Drop SDG&E; Bills to SCE Level

San Diego Gas & Electric’s residential electricity rates, long among the nation’s highest, would be comparable to Southern California Edison’s rates if the state Public Utilities Commission approves a $121-million reduction recommended Friday by a PUC law judge, an SDG&E; official said.

Under the proposed reduction, monthly bills for SDG&E;’S average residential customer (based on 400 kilowatt-hours of electricity and 40 therms of natural gas) would fall by $2.40 to $59.37.

SDG&E;’s average monthly gas and electricity bill hit an all-time high of $72.75 in the fall of 1983. With Friday’s recommended reduction, bills would be $13.38 below that 1983 peak, SDG&E; Pricing Manager Doug Hansen said.

Hansen predicted that the proposed cut would make SDG&E;’s rates “right in there” with those of Southern California Edison. Edison spokesman Lewis Phelps, however, disagreed with the assertion that San Diegans’ residential rates will be similar.

“Depending on what actions the PUC takes on (SCE’s pending rate cases), our overall system rates for Edison and SDG&E; will be about the same after Jan. 1,” Phelps said. “However, we expect that our residential rates will continue to be about 10% below SDG&E;’s.”

Edison’s average rates also have been adversely affected by PUC-mandated rate collection procedures, Phelps said. Without those complex collection procedures, Edison’s overall rates would be a penny per kilowatt less than SDG&E;’s average rates, according to Phelps.

The rate discrepancy is important to San Diegans because SCEcorp, Edison’s Rosemead-based parent company, wants to acquire SDG&E; and blend the San Diego utility into Edison. The proposed $2.16-billion merger would create the nation’s largest electric utility with 4.4 million customers.

As part of an ongoing campaign to win regulatory approval for the proposed merger, SCEcorp and Edison Chairman Howard Allen have promised to slash electricity rates for San Diegans by 10% if the proposed merger occurs.

Friday’s recommended rate decrease, which now must be approved by the state Public Utilities Commission, would take effect Jan. 1. SDG&E; believes that the reduction would make its rates “very comparable” to Edison’s residential rates, Hansen said.

“We’d be within plus or minus a couple of percentage points of where Edison would be at the first of the year,” Hansen said. “We’re delighted to have a decrease . . . of that size and magnitude.”

The average rate that SDG&E; charges its residential, commercial and industrial customers for electricity would fall to 8.8 cents per kilowatt-hour if Friday’s recommended reduction occurs, Hansen said. That would push SDG&E;’s average rate below Edison’s current average rate of 9.03 cents per kilowatt-hour, he said.

SCEcorp made its uninvited bid for SDG&E; this summer, shortly after the San Diego utility announced its plans to merge with Tucson Electric Power.

SDG&E; and Tucson Electric, blaming anticipated fierce opposition from SCEcorp, earlier this month abandoned their proposed merger. At the time, an SCEcorp spokeswoman said that the Rosemead-based company’s $2.16-billion bid for SDG&E; was “still on the table.”

Friday’s recommended rate decrease, which was proposed by a PUC law judge in San Francisco, combined several complicated rate-making cases involving SDG&E.; The recommended cut resulted from rate cases that involved the San Onofre Nuclear Generating Station, SDG&E;’s allowable rate of return for shareholders, and an annual review that determines the cost of fuel that SDG&E; burns to generate electricity.

“I’d say it’s a pretty good deal,” said Michael Shames, executive director of San Diego-based Utilities Consumer Action Network. “It brings our San Diego ratepayers close to parity with Edison’s rates, which means we’re moving in the right direction. We’re looking pretty good.”

SDG&E;’s rates could dip even lower in early 1989 if the PUC adopts a separate $29-million rate reduction in connection with SDG&E;’s Southwest Powerlink transmission line, Shames said.