SDG&E; Seeks Hefty Rise in Electric Rate
San Diego Gas & Electric asked state regulators Friday to approve a $145.3-million electric rate rise that would increase a typical residential gas and electric customer’s monthly bill by $5.63.
The increase, which would take effect Jan. 1, 1993, is one of the largest rate increases sought by SDG&E; in recent years. It will take about a year for the state Public Utilities Commission to issue a final ruling on SDG&E;'s request.
Also on Friday, SDG&E; sought regulatory approval for a $10.4-million refund that would produce a one-time, $8.54 rebate to natural gas customers. SDG&E; officials also used the massive PUC filing to make a highly unusual pledge to keep electric rates lower than those charged by Southern California Edison and Pacific Gas & Electric.
SDG&E; officials said the hefty rate request was driven by costly state-mandated programs, needed improvements in the utility’s electrical service system and equipment needed to meet anticipated growth in customer demand.
SDG&E; customers will view the rate increase as “reasonable” given the service improvements it will fund, said Lee Schavrien, SDG&E;'s manager of revenue requirements.
“Customers don’t want to pay for a gold-plated system,” Schavrien said. “But they expect a reasonable level of service. . . . We believe that this filing will allow us to provide an appropriate level of service and still remain the state’s low-cost provider.”
SDG&E;'s proposed rate increase drew immediate and heated opposition from Michael Shames, executive director of Utility Consumers Action Network, a San Diego-based consumer group.
“SDG&E; must have thought that today is Christmas,” Shames said during a Friday-morning press conference in a meeting room replete with ornaments and Christmas stockings. “SDG&E; has to learn that San Diego isn’t Santa Claus, and this wish list is not going to be realized,” Shames said.
Shames also said that SDG&E; officials are out of sync with the economic slowdown that has battered San Diego County’s economy. “Everyone else is being forced to tighten their belts, and SDG&E; should also be looking for ways to save money,” Shames said.
Although Shames was unable to estimate how large a rate increase the PUC would allow, he predicted that the utility “might be able to make a case” before the PUC for about half of the $145.3 million requested.
If the full rate increase is approved, the typical monthly gas and electric bill for an SDG&E; residential customer would rise by $5.63 to $71.05 on Jan. 1, 1993. That total includes the already PUC-approved rate increase of $2.48 that goes into effect Jan. 1, 1992. The two rate-increase requests were submitted independently, and the $5.63 jump will be in addition to the 1992 rate rise.
SDG&E;'s typical residential monthly bill hasn’t risen above $71 since 1983, when the utility won unwanted notoriety for being one of the nation’s most expensive electric producers. Rates began to tumble after 1983, and SDG&E; is now charging lower residential electric rates than Edison or Pacific Gas & Electric.
It was that history of high rates--and the resulting public outcry--that prompted SDG&E;'s unusual pledge to maintain “SDG&E;'s position as the lowest-cost supplier in California,” Schavrien said.
The filing acknowledged that SDG&E;'s electric rates, along with rates charged by Edison and PG&E; will “continue to face upward pressure” during the decade. But Friday’s PUC filing indicates that SDG&E;'s rate increases will be slower than those at Edison and PG&E.;
SDG&E; officials said about $84 million of the requested $145.3-million increase would finance improvements to SDG&E;'s electrical generating and distribution system. SDG&E; hopes to cut the average length of outages from 72 minutes per customer annually to 60 minutes by 1995. SDG&E;'s average length of outages is now relatively high compared to other utilities, Schavrien said.
The $145.3-million request also includes $25 million to cover costs generated by an “expanded package of state-mandated programs an incentives to increase energy efficiency among customers,” Schavrien said. It also includes $20 million for tougher environmental standards and $16 million for the impact of inflation.
Schavrien said about $20 million of the $84 million to be spent on upgrading the utility’s system is linked to projects that were postponed in anticipation of SDG&E;'s since-abandoned merger with Southern California Edison.
The filing also includes a planned $10.4-million refund to the utility’s natural gas customers. The one-time refund, which must be approved by the PUC, is provided by “monies returned from pipeline companies that deliver gas purchased by the utility for its customers,” according to Schavrien.
The refund, if approved, would be one of the largest in the company’s history. Customers would receive checks in February.
Where the Money Will Go New environmental regulations: $20 million Inflation costs: $16 million Upgrading distribution system: $84 million State-mandated program costs: $25 million Total rate hike request: $145.3 million
Source: San Diego Gas & Electric
Consumer Impact Typical residential residential gas and electric bill on Jan. 1, 1992: $65.42 Proposed increase, to be effective Jan. 1, 1993: $5.63 New typical monthly residential gas and electric bill: $71.05
Typical residential customer’s monthly gas and electric bill: 1983: $72.75 1984: $66.37 1985: $66.19 1986: $62.07 1987: $62.07 1988: $61.77 1989: $58.68 1990: $61.08 1991: $62.94 1992: $65.42* 1993: $71.05** * Jan. 1, 1992, rate previously approved by state Public Utilities Commission. ** Predicted average bill effective Jan. 1, 1993, if PUC approves SDG&E;'s proposed rate hike.
Source: San Diego Gas & Electric