Energy Hog Plug by SDG&E


by Don Bauder — On June 1, Jeff Martin, chief executive officer of San Diego Gas & Electric, wrote to Michael Picker, the new president of the California Public Utilities Commission. Martin was plugging the plan of SDG&E to get a new rate structure  in which the big users would not subsidize small customers as much as they do now. 

The utilities call it a plan to simplify the rate structure — make utility bills more understandable. But the San Francisco–based Utility Reform Network (TURN) thinks it is just a plan to “give energy hogs a break at the expense of everyone else. Approximately 75 percent of residential customers will see higher bills if SDG&E’s proposals are approved,” said the reform network today (June 16).

Martin’s letter bolsters the network’s position: “Today, our upper tier customers [large users] subsidize our lower tier customers [small users] by over $300 million annually,” said Martin in the letter — a statement that verifies what critics have been saying: SDG&E’s plan will take money from lower-income families to subsidize large corporations and other major users of utility power.

There is another important point about Martin’s letter: according to the Utility Reform Network, it does not reveal that Martin and other SDG&E executives will get fat bonuses if they convince the commission to okay the new rate structure (a decision should be made this summer).

Said Matt Freedman, attorney for the Utility Reform Network, “If Mr. Martin is going to make his case in a public letter, he should include all the relevant facts — including the additional compensation Martin stands to collect under a bonus plan that will reward executives if they win the fixed charges SDG&E wants.”

Interesting that on February 26, after fourth quarter 2014 earnings came out, Debra Reed, chief executive of Sempra Energy, parent of SDG&E, said, “We are on track to be at the upper end of our expected 9 percent to 11 percent earnings per share growth rate for 2014 to 2019.”

Sempra still has the utilities commission in its pocket, as its earnings and stock price outperform almost all major utilities.

I called Sempra Energy, which referred me to SDG&E. SDG&E did not call back before deadline.