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SDG&E Rate Hike Approved By CPUC

Bills for San Diego Gas & Electric customers will rise as soon as Sept. 1 after the California Public Utilities Commission today authorized a $123.4 million rate increase for the company.

The CPUC said a typical electric customer's bill could increase 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.

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

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.

San Diego County Supervisor Dianne Jacob reacted with dismay to the CPUC's action, saying in a statement:

"I'm disappointed that state regulators put the needs of the utility above the consumer. The bigger bills will not only hurt ratepayers, but are a reminder of SDG&E's stranglehold on the local energy market. 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."

A statement from the regulating agency said the increases will allow the utilities to maintain, replace, and improve aging infrastructure, and to operate their systems in a safe and reliable manner.

"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 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.

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.

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