Utility Plans $390 Million in Customer Rebates

Some residents in San Diego and Orange counties will be a little richer this summer.

San Diego Gas & Electric has announced plans to distribute $390 million in cash rebates to 1.1 million customers--an average of $260 to residential users and $870 to businesses.

The checks to 1 million customers in San Diego County and 100,000 users in south Orange County will be mailed during the August billing cycle.

The California Public Utilities Commission approved the rebate, which is a result of the sale of two San Diego power plants, lower energy prices and the refinancing of debt. The utility had been allowed to charge customers for bonds used to offset a rate decrease that ended last year.

SDG&E; took these measures as part of the transition from a regulated to a competitive energy marketplace. In this new environment, major utilities have shed some unprofitable assets and looked for additional ways to cut costs.

Before deregulation, the state’s power plants and transmission grid were primarily controlled by the three large investor-owned utilities--Sempra Energy’s SDG&E;, Edison International’s Southern California Edison and PG&E; Corp.’s Pacific Gas & Electric.

Deregulation has opened the utilities’ territories to other retail electricity marketers and required the utilities to divest power plants.

SDG&E; customers will continue to pay an average $5.40 per month over the next eight years to pay off the bonds used in the refinancing.

Customers’ base electric rates will continue to run about 5% less than before the industry restructuring. This base electric rate accounts for about 65% of every electric bill.

Regulators also voted to allow Edison International, PG&E; and Sempra Energy to buy power on exchanges that compete with one set up by California, reversing part of the state’s 4-year-old deregulation law.