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SDG&E Wants Customers Instead of Shareholders To Bear Pipeline Upgrade Costs

If regulators agree with SDG&E, customers would pick up the tab for $235 million in pipeline upgrades.

Regulators are expected to decide by early next year whether San Diego Gas & Electric shareholders or the company’s customers should pay for pipeline safety upgrades.

SDG&E’s parent company has asked regulators to allow it to charge ratepayers $61 million for pipeline testing, repairs and renovations over the next three years. The company would bill customers for the remainder of the $235 million total cost over a longer period.

The division that represents consumers at the California Public Utilities Commission, however, argues SDG&E shareholders should pay for most of those costs.

The Division of Ratepayer Advocates said the utility has not provided any cost-benefit studies to justify all of the pipeline work.

“SDG&E needs to concentrate on insuring the pipeline system is safe and not on using this occasion to add to their bottom line with unsupported and possibly unnecessary system enhancements,” said Joe Como, acting director of the DRA. “It’s wrong to ask customers to pay for upgrades that SDG&E cannot demonstrate are needed.”

SDG&E has said it will answer the DRA’s claims later this month. The company said its proposed pipeline upgrades are a response to new requirements from the PUC.

“We designed our plan to meet four overarching objectives: enhance public safety, comply with the requirement of the CPUC order, minimize customer impacts and maximize the cost effectiveness of any infrastructure investments,” said Michelle Nixon, SDG&E’s director of communications.

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