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SDG&E Wants Shorter Review For Future Insurance-Related Rate Increases

Audio

Aired 7/27/10

A judge could hear oral arguments next month on a request by San Diego Gas and Electric to raise rates to cover higher fire insurance costs. SDG&E also wants approval for an abbreviated process for future insurance-related rate increases.

— A judge could hear oral arguments next month on a request by San Diego Gas and Electric to raise rates to cover higher fire insurance costs. SDG&E also wants approval for an abbreviated process for future insurance-related rate increases.

SDG&E wants a $29-million rate increase to cover what it says are higher fire insurance expenses. In order to win this increase, SDG&E must meet eight conditions.

For one, the utility has to prove the costs were beyond its control and not a normal expense of doing business.

But SDG&E is also asking that it not be required to meet these eight conditions for similar rate increases in the future. SDG&E spokeswoman Stephanie Donovan says if regulators approve the $29-million rate increase, then there are no further questions of fact to decide.

"So another application would be a waste of time," Donovan said. "There's really no need to reinvent the wheel. The advice letter process would simply apply the outcome of the initial PUC decision as the numbers change from year to year."

Customer advocates say such a truncated process, called an advice letter, could mean less public scrutiny.

"DRA is concerned that SDG&E's proposed advice letter process could end up being a blank check," said Ed Moldavsky of the Division of Ratepayer Advocates at the California Public Utilities Commission. "They are required under the current criteria to come up with non-speculative costs and not shift the burden of proof to the CPUC staff."

Moldavsky says part of the problem is that that Division of Ratepayer Advocates does not always have the resources to investigate claims SDG&E might make to justify future increases.

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