Supervisor Jacob 'Disappointed' With SDG&E Rate Hikes

Supervisor Dianne Jacob said she was "disappointed that state regulators put the needs of the utility above the consumer" Thursday after the California Public Utilities Commission’s (CPUC) voted unanimously to approve a $123.4 million rate hike for San Diego Gas & Electric (SDG&E) ratepayers.

Bills for SDG&E customers will rise as soon as Sept. 1, with a typical electric customer's bill increasing about 12.2 percent, or $9.95 per month, while households that receive natural gas would have to pay an extra 9.6 percent per month, or around $3.55, SDG&E reported.

"The bigger bills will not only hurt ratepayers, but are a reminder of SDG&E's stranglehold on the local energy market," Jacob said in a statement. "Consumers need more choices on where and how they get their energy so they're not at the mercy of the utility giant every time it wants to boost its bottom line."

The rate increase was $116 million less than SDG&E requested, the agency reported. The utility will be allowed $1.73 billion in revenue annually through 2015.

Increases were also authorized for the Southern California Gas Company, which, like SDG&E, is a subsidiary of Sempra Energy.

“Today’s decision by state regulators will allow us to continue to operate our natural gas and electricity systems safely and reliably and to increase system efficiencies and customer benefits through technology enhancements," SDG&E said in a statement.

The CPUC estimates are based on use of 500 kilowatt hours per month of electricity and 33 therms of gas per month.

“Due to the current tiered electric rate structure, the majority of the residential portion of the increase approved today will be borne by customers who use more than 500 kilowatt-hours (kWh) each month, because, under current state law, rates for customers in the lower two tiers can rise only 3 percent to 5 percent per year,” the major power company said. “SDG&E’s other customer classes also will see an increase.”

The utilities will be required to invest $170.5 million in gas transmission and distribution integrity management systems, according to the CPUC. The agency recently recommended a record $2.25 billion fine for a natural gas explosion in 2010 in San Bruno, near San Francisco. Eight people died as a result of that explosion.

"Safety and reliability do not come free," said Commissioner Mark Ferron. "While we must do our best to contain costs, we do have to spend some more on safety and reliability."

The CPUC said that if the utilities don't need to spend all $170.5 million, the savings will be returned to customers.

The commissioners established financial incentives to SDG&E to exceed target levels for electric reliability and monetary punishment if the utility falls short of the goals. They also voted to reduce authorized pension contributions by more than $15 million for SDG&E and by more than $32 million for SoCalGas.

SDG&E said they will reach out to residential and business customers to offer programs and solutions to help them manage their energy use and reduce their bill.

—City News Service contributed to this report.