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Roundtable: Why your SDG&E bill is so high

 March 18, 2022 at 12:00 PM PDT

S1: This week on roundtable. Why are San Diego's energy rates so high ? We'll talk with a reporter working to explain every line of your star bill. Also , questionable spending by one of our biggest public agencies. And the risky work of being a journalist inside of a war zone. I'm Matt Hoffman , and this is KPBS Roundtable. If there's a silver lining in the cost of energy this week , it's that the cost of gas isn't moving as fast. But we're still pushing $6 a gallon at stations across San Diego. The bills arriving in your mailbox are not much better , with customers seeing their costs soar over the last year. Voice of San Diego recently broke it all down , line by line to try and explain why it's happening. The answers they found might not be satisfying , but it's important work that helps us understand what's going on. Mackenzie Elmore wrote this story and she's back on roundtable this week. Hey , Mackenzie. Hey , Matt. Good to have you here. So you start off in this story by noting that San Diego's energy prices are literally the highest in California.
S2: Thing recently , Stephanie's rates have pretty much been the highest of the three big power providers in California since at least 2013. And its rates have inflated the fastest since then to rates have increased by 48% since 2013. And for Pacific Gas Electric , it's been about 37%. And at Southern California Edison , it's been about 6%. And according to the California Public Utilities Commission , which is the state regulator for utilities in California , part of the reason why Sydney has such a high rate is that it has a smaller number of customers which just spread out all of its costs over compared to the other two big power providers.
S1: All right. Let's get into some of the details here. One of the big things driving this increase was a rate hike approved by state regulators.
S2: And that includes residential customers , agricultural , commercial industrial buyers as a whole. But for residential customers , separately , though , as you said , the rate was about 7% total. And so those rate hikes are something that utilities go to the CPC for years earlier or months earlier and get approved. And it's often something that people don't really realize is happening in the background , but they are on the books. And so ratepayers can look up when their future rate hikes are going to be in and how much it will be. And the other pieces that the gas rates also spiked dramatically , too , which is pretty unexpected. Gas has generally been cheaper than electricity , but there was a 25% spike in rates this winter. And Sajani said that's because we had a colder winter than normal , which means people need to use more energy. And there are also some geopolitical conflicts over oil and gas right now which affect rates locally , if you haven't noticed.
S1: Yeah , sort of along those lines , you know , we know that electric takes up the bulk of usage and we'll get to that in just a minute. But international issues are affecting the price of gas lately.
S2: You know , the utility's parent company is Sempra , and they're a liquefied natural gas exporter , which means they take natural gas and ship it out all over the world. And the recent invasion of Russia and Ukraine has caused an upheaval in the natural gas and petroleum markets worldwide because Russia is a big producer of natural gas. And so Russia's done gas exports to Europe , and Russia provides about a third of Europe's gas. And so that put a strain on the whole market in general. And plus , companies and countries that disapprove of what's going on in Russia are starting to turn away from those Russian products , which just puts pressure on prices in the global market sort of worldwide.
S1: I'm talking with voice of San Diego's environment reporter Mackenzie Elmer. And Mackenzie , when it comes to the electric portion of our SDG bills , a lot of it depends on where you live and even the season that we're in.
S2: So all Californians are placed in a climate zone. There are four and they're found next to the electric service portion of your bill if you want to look where you live. And each zone is given a certain energy allowance depending on the season. And so if you exceed that allowance , you use more energy than you're basically allotted for your climate zone. You're dinged with the high energy use bill and that money goes back into a pot that helps pay for poorer San Diegans energy bills. It's sort of like a subsidy pot. And so if you live in the coastal or inland climate zones , it's generally , you know , a cooler zone where ocean breezes kind of help regulate the climate , make it more comfortable. So those allowances of energy are generally lower than , say , the mountain or desert climate zones , which have a higher energy allowance because the climate is more extreme and people have to use more energy.
S1: Then you get into all the fees , some of which are not directly tied to the day to day energy that we use. Things like wildfire prevention and the decommissioning of the. Nuclear power plant up at San Onofre.
S2: Mostly everything the company has to pay for is then passed on to ratepayers , and that's just how investor owned utilities work. It's going to cost billions of dollars to close the Center for Nuclear Power Plant , which is owned by Southern California Edison. And both Jini and AC are subsidiaries or are basically like children of Sempra , the parent company. And so both customer bases benefited from that nuclear power plant. So both are supporting the cost of the construction. And yes , wildfire prevention is a big and more recent cost is already spent $3 billion in the last decade to help prevent wildfires from happening. And they plan to spend another 770 million more on a new plant that's been proposed this year. And that money goes towards things like replacing wooden poles and electric poles with steel ones , trimming trees and running technology to prevent fires from sparking on utility lines. And whenever you build something , the company makes a 10% rate of return on that. That's just how the state basically permits the companies to make a profit. And so they make that on everything they build. And so all of that money is then built into the rates that customers eventually paid for.
S1: Sounds complicated and it sounds expensive.
S2: And that's precisely why I wanted to start with the simple breakdown of everything that customers are charged for on their bill. And having that kind of education just helps customers maybe make decisions about using less energy , which will drive down their cost and maybe make them more interested in following some of these energy policy discussions , some of which I know seem very boring. But as you can see , they have a really good , really great impact on your pocketbooks.
S1: This topic is always sure to get people talking because we all have to deal with it whether we own a home or we rent.
S2: But electricity costs are trickier because there's a lot of infrastructure costs built in there or those , you know , poles and wires I mentioned earlier that are being built or fortified against wildfire. And those are all costs that drive up the price of electricity , for sure. So I guess the thing to do would be to pay attention to your local politics , because there will be decisions on the horizon about what kind of energy you want our new public power company to buy , that's San Diego Community Power and then also the Clean Energy Alliance up north in North County. And so those are run by a handful of mayors and elected officials from the region. And they'll all be making decisions about buying more renewable power or building more renewable projects , which will also cost the ratepayer. But at least the public will be able to have a say as it's a publicly controlled agency. And the final thing that I would pay attention to as a citizen is that , you know , the city of San Diego , if you're there , they're about to start a new public watchdog committee where you will have to give reports and updates on its future rate increases and sort of a public meeting setting. So that's new. And people will be able to weigh in there , too.
S1: And before we go , Mackenzie , this story you did was part of a larger series that Voice of San Diego is working on all about the cost of living crisis.
S2: But at Voice , we really started talking about throwing all these different costs into a series like early last year when we saw San Diego were struggling to pay off their water bill that they incurred over COVID 19 pandemic. And the pandemic has completely pulled the plug on the market , and inflation is just everywhere now. So we've been doing a lot of really cool stories before , very different San Diegan families allowed our reporters , Lisa Halberstam and will HUNTSBERRY to publicly dive into their budgets to showcase precisely how San Diego expenses sort of bear down on people differently. Our editor , Andy Keats , wrote a really great story about how the rising cost of housing is pushing San Diego and sometimes outside of the county to live , which in turn drives up the cost of transportation. And so those two things are just inextricably linked now. And if I may say , as an environment reporter , very bad hit. The region is going to reach its goals for combating climate change , which we know is mostly driven by driving. So we got a bunch more stories coming this week in our series , so stay tuned.
S1: I've been speaking with Voice of San Diego environment reporter McKenzie , Elmore and McKenzie , always good to have you here.
S2: Good to talk to you , too , Matt. Thanks.
S1: There's another money story that you should read this week. It's a piece of accountability journalism by a news source. It details some of the questionable spending inside of the region's top planning and transportation agency known as SANDAG. They're the ones that recently built the new mid-coast blue line trolley extension. Jennifer Bowman got access to an internal audit and recently shared what was spent with taxpayer money. Hey , Jennifer.
S2: Hi , Matt. Thanks for having me.
S1: Great to have you here. So we know that SANDAG investigators , they looked at about four years of spending here. Was this like a standard review or did anything compel the agency to look deeper at this spending ? Yeah.
S2: So this is a review of what's known as the agency's purchase cards or procurement cards. Basically , SANDAG issued credit cards and the review was done by the agency's independent performance auditor. Some who follow SANDAG news may know it's a fairly new office. The position was created by a state law that was in direct response actually to a tax measure scandal at the agency back in 2017. This particular review was pretty standard. It was included in the agency's annual audit plan.
S1: In your story , you detail some of the improper and questionable payments that were revealed during this audit.
S2: They found almost $70,000 was spent at local restaurants over that four year period , nearly 250,000 in transactions on non-working days. So like holidays and weekends. And they also narrowed in on money that was spent on a staff retreat at a downtown San Diego hotel back in 2019. But the auditors also flagged the ways the cards were used. So , for example , the policy at SANDAG is there's a 30 $500 limit for a single transaction on these cards. But auditors found what's known as split purchases , where staff broke up a larger amount into multiple charges to circumvent that limit. They also bought hardware and software like laptops using the cards , which other agencies don't allow.
S1: So I guess maybe a simple question , but how did this happen ? Like , do we know if the problem might have been like a lack of training on procedures about how to report expenses ? Yeah.
S2: Auditors said not only a San Diego's policies on these credit cards lacking , quote , basic elements seen at other agencies , but that training for staff on that policy was minimal. So documentation was missing for these purchases. There were no specific consequences in the policy should an employee violate it. And in fact , the independent performance auditors said that their findings are similar to their prior report , similar to previous audits they've done with SANDAG , where they found weaknesses in system controls and what they called vaguely defined policies and procedures.
S1: So it sounds like there's definitely areas that SANDAG needs to improve on.
S2: They're now down to six cards that at one point they had as many as 20 during the review period and they expect to return to the SANDAG board with the new policy as early as next month , which they said during their meeting was a particularly quick turnaround for this audit.
S1: We're talking with a new source , investigative reporter Jennifer Bowman. And Jennifer , is this audit actually over or is work still being done , whether it be behind the scenes or in a public facing view to figure out , you know , how some of this money was spent and maybe why ? Yeah.
S2: SANDAG says it's quickly turning to address the audit's findings. And in fact , management had no objection to the review from staff. There have been instances in the past or management actually objects to the audits findings , but that wasn't the case here. And so what we should see soon , in addition to that policy , is action on the recommendations that auditors have have given. And among those recommendations is additional training , but also strict enforcement of the policy. So they're actually proposing that the agency track non-compliance by employee and to tally all improper charges and seek reimbursements.
S1: SANDAG has a board that votes on its actions and helps keep the agency accountable. It's a panel of elected leaders from all across the county , typically made up of mayors and city council members. This audit was discussed at its last meeting.
S2: On one hand , you saw board members actually express appreciation of the audit. And we heard National City Mayor Alejandro Sotelo Solis say the report shows that that new law that created the auditor's office , this shows that it's working. But you also had several board members express concern and downright frustration. That improper spending went on for multiple years , seemingly without any consequences. We heard from Carlsbad Mayor Matt Hall. He directly blamed management and criticized them for the spending that happened on their watch.
S1: The amount of money we're talking about , it's substantial , but it's a small portion of sandbags. Overall budget , which is well over $1,000,000,000 per year.
S2: And you're right , it's a small pot of money relative to its budget. But public credit cards like these , they're considered a high risk area for any organization. And in the worst cases , poor policies and lack of oversight makes way for theft and fraud. And SANDAG is not an insignificant agency. It has that large budget , like you mentioned , and its board is made up of elected leaders across the region who help make some of the most significant decisions in our communities. And this audit shows that this large , major agency had improper spending continue over a years long period , and that's naturally something that's going to concern taxpayers.
S1: And finally , Jennifer , there's certainly questions about if these expenses were proper.
S2: It's not something that auditors directly addressed. There was a question of that that board members had asked the independent auditor. But part of the problem , they say , is that so many of these purchases lacked proper documentation. And so because of that , I can't really determine whether to discipline any staff or for the questionable spending either.
S1: Jennifer Bowman is our guest. You can read her full story at I new sauce dot org. And Jennifer , thanks so much for your time today.
S2: Thank you.
S1: Now to the war in Ukraine , where Russian invaders have been targeting civilians across the country for the last three weeks. Millions of people are now refugees in neighboring countries. It's impossible to say at this point how many innocent people have died , but estimates already put it in the thousands. And this week , we saw the first killings of international press. Two members of a Fox News crew were killed along with an award winning American filmmaker. Here's the U.S. deputy representative to the United Nations , Richard Mills , reacting this week.
S3: I'd like to begin by expressing our outrage over the death of journalist Brent Renaud , who was killed by Russian forces while covering refugees leaving a checkpoint. It happened yesterday. According to his colleagues , Mr. Redden was in the area because he understood the critical role. Independent media has played in providing objective coverage of Russia's war of choice against Ukraine. His death shows that Russia will go to any extent. To silence narratives that challenge its propaganda.
S1: Several other journalists are recovering after surviving those attacks. All of them are reminders of the dangerous assignment of a war correspondent. Our guest today knows it all too well after having made several trips to war zones for the L.A. Times. We welcome back reporter Tony Perry to roundtable. Hey , Tony.
S4: Hey , I'm good. Thank you.
S1: Good to have you here. So you were the San Diego bureau chief for many years and part of that work , Turkey to Iraq and Afghanistan.
S4: And I made seven trips to Iraq and seven to Afghanistan , always covering the Marines from Camp Pendleton.
S1: We want to get your perspective on the preparation and some of the risk involved with this kind of work.
S4: You should stay at all times with a level of fear in your gut. According to a one of these grizzled old sergeants who talked to me. Fear keeps. You're focused. Fear can keep you alive. That's not a bad lesson. Coming home alive is devoutly to be wished.
S1: Knowing that these were dangerous assignments , I'm curious about how you or maybe others ended up getting them.
S4: When you're the San Diego reporter and a good deal of your beat picks up and goes into a war zone. You go with them without any question , without any arm twisting by editors up in Los Angeles. And of course , American reporters have always gone with the troops. When the troops go to war , if the reporters don't go with them , what the hell are we in business for ? So I went I went every time I had a chance and I would go again if the circumstances were the same. But of course , circumstances change greatly. And we , the Los Angeles Times , I'm still a loyal retiree , have some awfully good people in Ukraine , both reporters and photographers. So I think they're doing doing the institution proud.
S1: And following the Marines and some of those hairy situations.
S4: And the brave stuff was being done by 19 year old Americans with short haircuts. They were the ones that day in and day out , particularly in Afghanistan. They were the ones day in , day out or going where it was the roughest , where there were people peeking through what they call murder holes , trying to shoot at them. They're the ones that we should always think about when we think about what were those wars about who went ? What did they do ? The story is not the reporters. The story is these young men and young women that we send halfway around the world and tell them to locate , clothes , engage and kill the enemy as defined by the president of the United States.
S1: A term in the news business that's common when it comes to reporting internationally is a fixer. And these are locals in the country who help with the language , culture and simply getting from point A to point B. The producer for the Fox News crew who died was a 24 year old Ukrainian woman who was working in that role.
S4: I had a very , very good fixer , for example , in Afghanistan. He drove me around everywhere in Kabul and where we were outside. He knew the language. Of course , he knew the culture. He knew the history. He could take me places and say this area was all shot to pieces during the revolution , after we kicked the Soviets out , when some young people tried to surround me and grabbed my luggage , he was right there to pull me out of that. She took me to a hospital that specializes in making artificial limbs for all the victims on both sides , all sides of the Afghan wars. I only hope that he's been able to get out or find his piece. These fixers are absolutely essential and they deserve our respect. Yes , the fixer for for Fox , Sasha , she was known , was marvelous. She did some work for BBC also , and I'm glad that we are recognizing her for her achievements at age 24. It's terrific and very sad her passing.
S1: We're talking with former L.A. Times bureau chief Tony Perry. And Tony , the media landscape is a big part of this war. Russia is criminalizing much of the dissent and huge numbers of people have been arrested for protesting there. That includes the state news employee who went viral by holding a no war poster. That was during a live broadcast on state media. Do you think that this war is not just for you ? Brains , freedom , but also the Russian people. Absolutely.
S4: Absolutely. And it is a media war. And the Ukrainian president Zelensky has proven to be marvelous at courage , but also in how to present his story. The speech he made to the United States Congress on Wednesday was preceded by that video that they had , and I would recommend anybody who hadn't seen it go to your website , look at it , if that will tell you everything you need to know in a short form. About 3 minutes about this horrible war. About what ? Well , one of the poets long ago referred to as the monstrous anger of the guns. What we do have monstrous anger of the guns in Ukraine , and the story is being muffled by the Russians. Putin does not want his people to know what really is going on. But there has been some courageous Russian journalists , including the young woman who held up the sign and then later got arrested. But there are others that are doing things. And of course , that's what the Western journalists are doing. Why were they targeted potentially ? Because they were what Putin does not want out. They represented the truth.
S1: As we sort of wrap up here.
S4: That's what this war shows me , that a modern war is going to be covered with modern media and modern technology. This is not D-Day and World War Two , where it took , what , three or four days to get the first story out about what happened on Omaha Beach. Now they're out immediately and the Americans can see it. The world can see it.
S1: That's Tony Perry , former San Diego bureau chief for the Los Angeles Times. And Tony , thanks so much for your time today.
S4: My pleasure.
S1: Thanks so much for tuning into this week's edition of KPBS Roundtable. And thank you to my guests , McKenzie Elmer from Voice of San Diego. A new source , investigative reporter Jennifer Bowman and former L.A. Times San Diego bureau chief Tony Perry. If you missed any part of our show , you can listen anytime on the KPBS roundtable podcast. I'm Matt Hoffman. Join us next week on Roundtable.

A San Diego Gas & Electric truck loaded with equipment.
Gina Jacobs
A San Diego Gas & Electric truck loaded with equipment.
An explanation for why SDG&E utility bills have increased in recent months, SANDAG investigates questionable spending within the transportation and planning agency, and some insight on what it's like to work as a reporter in a war zone.

KPBS reporter Matt Hoffman talks with environment reporter MacKenzie Elmer, who explained what makes up San Diego Gas & Electric utility bills as part of Voice of San Diego's series on the local cost of living crisis. Jennifer Bowman, investigative reporter for inewsource, tells us about questionable spending by SANDAG that was recently brought to light by an audit of the agency's finances. We also hear from former LA Times San Diego bureau chief Tony Perry about his work in war zones and how journalists deal with those risks.