State utility regulators are weighing a proposal to increase electricity and gas rates by at least $723 million over a four-year period for customers in San Diego and southern Orange counties.
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More than a year past due, the contested case before the California Public Utilities Commission could come to a vote as soon as early next month and will apply retroactively to rates starting Jan. 1, 2012, and extending through 2015.
Closely watched by utility investors and consumer advocates, the deliberations will determine how much can be spent on the region’s complex web of electrical wires and gas pipelines, along with the training, salaries, incentives and retirement of people operating them.
“We’ve been able, in past years, to find some kind of middle ground,” said Bob Finkelstein, general counsel for The Utility Reform Action Network in San Francisco, among more than a dozen advocacy groups contesting SDG&E’s requests. “This time … the gap was too large. It was a bridge too far to get to figuring out a settlement.”
The result is an itemized, 1,300-page proposed decision by an administrative law judge in the case, John Wong, that could still undergo changes as it comes to a vote before the five-member, governor-appointed utilities commission. Rate increases for SDG&E affiliate Southern California Gas also are addressed.
The proposed decision would bump up SDG&E revenues retroactively by $140.2 million to $1.75 billion, effective Jan. 1, 2012.
That’s a one-year, 8.7 percent increase (though it will be applied to bills gradually over more than two years to prevent hardship). The impact on individual utility bills would be less significant because state-authorized rate increases do not affect commodity, transmission and some other charges.
Stephanie Donovan, a spokeswoman for SDG&E, said costs are being driven up by safety and reliability needs, new electric grid technologies, expanded environmental regulatory requirements and higher insurance costs for wildfire liability and employee health care.
Competing efforts
The judge’s recommendation would reject $99.4 million of SDG&E’s request. That prompted a formal warning letter last week to investors in SDG&E’s San Diego-based parent company, Sempra Energy.
Wong summarized in writing competing efforts to sway the commission.
“Parties who oppose the proposed increases contend that due to current economic conditions, ratepayers cannot afford any increase in their electric and gas rates,” he said. “The applicants contend that despite the state of the economy, their costs have been increasing due to additional federal, state, and local regulations, as well as increases in the cost of materials and new technology, and the growth of their respective utility systems to meet growing demand.”
Among the slashed requests: $29.8 million for energy storage projects, designed to even out the availability of solar-generated electricity and other renewable power.
Read more at: http://www.utsandiego.com/news/2013/apr/26/tp-what-does-proposed-rate-hike-hold/?print&page=all
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