California regulators got an earful from San Diego Gas and Electric (SDG&E) customers upset about the utility’s request for an increase in revenue during their general rate case.
Every four years, the utility has to present its income and costs, and then make the case for how much revenue they plan to generate. If the California Public Utilities Commission (CPUC) approves the request, the case will set the total amount of revenue SDG&E is allowed to collect through rates from 3.7 million customers.
Many customers are outraged over the record high natural gas prices in their January bills and they questioned why the utility needs even more money.
“It’s unfair that they’re asking ratepayers to keep paying more and more,” said Paula Brandt of Poway. “Every time you open a bill from them they want to increase something.”
SDG&E’s general rate case calls for massive revenue increases starting in 2024 and running through 2027.
The utility is asking regulators to approve about $3.6 billion in new revenue over the four-year period. The increases all outpace the existing rate of inflation:
- 2024: $449 million increase (17.6%)
- 2025: $315 million increase (10.5%)
- 2026: $306 million increase (9.2%)
- 2027: $279 million increase (7.7%)
“As SDG&E looks ahead at what it will take to create a clean energy future and protect against climate threats, our general rate case is focused on maintaining a safe, reliable and resilient grid,” said Jamie York, SDG&E’s director of general rate case and revenue.
York said the revenue request allows the utility to prepare for a future transition to a grid that produces less carbon.
Company filings said that includes building energy storage projects, electric vehicle infrastructure and making the transition to a carbon neutral future.
In addition to a more resilient grid, SDG&E wants to advance other priorities.
“Develop clean fuel sources which include green hydrogen,” York said. “Strengthen cyber security and technology infrastructure and accelerate replacement of aging natural gas pipelines.”
The overwhelming majority of people who called into the hearing were there to urge the CPUC to reject the revenue increases SDG&E was requesting.
“I can’t afford to live without shaking in the cold,” said Patricia Demron, a resident of Carlsbad. “I can’t afford this.”
In 2024, a typical electric customer’s bill would jump about $108 a year and a gas customer would see a $115 a year increase. That is a $223 dollar a year increase for the 900,000 customers who have both gas and electric service.
“We’re paying close attention to what we’re hearing.”CPUC Commissioner Darcie Houck
Revenue targets can be adjusted each year after the revenue targets are approved if the utility files for a change during the course of a year.
SDG&E, a subsidiary of San Diego-based Sempra Energy, posted a $917 million profit in 2022. That’s up from the $819 million in 2021. Parent company Sempra profits were just shy of $3 billion last year.
Utility officials are urging customers to seek out income-based rate assistance help through the CARE and FERA programs. SDG&E also recently donated $16 million in shareholder funds to help people struggling to pay record high natural gas bills.
“The money offered to support struggling families represents less than a half a percent of their 2022 profit,” said Constance Slider Pierre of the Utility Reform Network. “These record profits and the penance they are offering is insulting and unconscionable. The time for the CPUC to say no and stop this insanity is past due.”
The utility said the extra funds are needed to make its power delivery system safe from wildfires. The money will pay for things like undergrounding of power lines, improved forecasting, early warning technology and brush removal that could feed a fire sparked by the utility’s power lines.
SDG&E officials said they have already spent more than $3 billion on wildfire safety measures over the last decade.
The utility also said it needs more revenue to become resilient in the face of climate change and to allow the utility to develop sustainable systems that focus on decarbonization.
SDG&E also wants to invest in their workforce and introduce new technology that will improve the customer experience and customer service.
“We’re paying close attention to what we’re hearing,” said CPUC Commissioner Darcie Houck. She was the only one of the panel’s five commissioners on the call.
Regulators can adopt the utility proposal or offer changes to the rate request proposal.
The CPUC is not expected to make a decision for another year.
There will be another virtual hearing next week on March 15, 2023. Then the CPUC will hold two in-person hearings in Sherman Heights on March 23, 2023.
