San Diego Gas & Electric customers may pay a few bucks more on their bills from March until the end of this year if the California Public Utilities Commission signs off on a request recently filed by the local power provider.
SDG&E officials blamed the increase partly on high electric prices due to last summer’s hot weather.
“At a very high level, it basically boils down to the price of electricity being higher than was forecasted,” SDG&E said in an email to the Union-Tribune.
If the commission approves the application, typical customers in the inland climate zone using 400 kilowatt-hours of electricity would see a 3.3 percent increase in their bills starting March 1 and going through Dec. 31. That works out to an increase of $3.66 per month during the winter pricing months of Nov. 1 through May 31 and $3.72 for the summer months of June 1 through Oct. 31. The increase, if approved, would expire after 10 months — Jan. 1, 2022.
In its request, SDG&E said it had an under-collection of $67 million through the end of October in its Energy Resource Recovery Account, which tracks the costs of fuel and power a utility purchases that can be recovered in rates. As per commission rules, companies can only recover the actual costs of those purchases and cannot make a profit on them. The costs are forecast for the year ahead. If the actual costs are lower than forecast, then the utility gives money back, but if they are higher the power companies can make up the difference by filing an application.
SDG&E anticipates an under-collection of $119 million for all of 2021.
Last year, SDG&E recorded a $138 million over-collection, which resulted in a reduction of about $4 for the months between March and December for a typical customer using 400-kilowatt-hours of electricity in the inland climate zone.
SDG&E put forth its most recent request in a filing it made last month to the commission. The application must go through the utilities commission’s multi-step process before the CPUC’s five commissioners vote on whether to accept, reject or alter SDG&E’s request. A prehearing conference is scheduled for Jan. 14. In its application, SDG&E proposed a possible decision can be made when the CPUC holds a voting meeting on Feb. 11.
John Mattes, an attorney and a resident of Del Cerro, said the commission should reject SDG&E’s request.
“The rate increase request is nothing short of galling,” said Mattes, who is also a member of the Citizens Franchise Alliance, one of a number of local groups calling for the city of San Diego to explore forming its own municipal utility. “We already pay the highest rates in the state and it is particularly galling they would do this in the middle of COVID.”
SDG&E spokeswoman Helen Gao said, “We recognize the timing of the filing is not ideal and to help minimize the impact on our customers, SDG&E is proposing to recover the under-collected revenue over a 10-month period versus a minimum 90-day period established by the commission … It’s also important to understand that if we delay addressing these types of under-collection issues now, balances could accumulate and result in bigger rate increases down the road. That’s something we want to avoid.”
SDG&E is not the only investor-owned utility in California that has asked for a rate increase.
Pacific Gas & Electric, which covers Central and Northern California and is the largest power company in the state, had its Energy Resource Recovery Account folded into its general rate case. The CPUC approved rate increases that went into effect Jan. 1 that are estimated to result in a net increase of $5.15 on a PG&E customer’s monthly bill. However, another rate change is coming March 1. A PG&E spokesman said the exact size of the change in March is expected to be known in a few weeks.
Southern California Edison received approval from CPUC commissioners last month on its 2021 Energy Resource Recovery Account that will result in a 2.2 percent increase in their customers’ average total bill, starting this year.
The Utility Reform Network, the San Francisco-based consumer advocacy group known as TURN, has called for all utilities in California to have a moratorium on rate increases through the rest of this year due to the effect the COVID-19 lockdowns have had on the economy.
“Our message is you are either part of the solution or you’re part of the problem and when you are raising rates for essential services when thousands if not millions of customers are losing their jobs and their sources of income, you are part of the problem,” said TURN spokeswoman Mindy Spatt. “So we would suggest SDG&E take a different approach.”
According to the CPUC, SDG&E’s average rate in 2019 came to 23.13 cents per kilowatt-hour, compared to 16.30 cents for PG&E and 13.62 cents for Southern California Edison.
SDG&E has cited a number of reasons for its higher rates, including:
- having fewer commercial and industrial sectors than PG&E and Edison, who make up a larger share of the energy load than residential customers
- having about 60 percent of its circuits and wires below ground, which are more expensive. The national industry average is about 40 percent, and
- since 2007, SDG&E has spent more than $2 billion through customer rates for wildfire prevention and mitigation efforts.
The summer of 2020 was unseasonably hot and dry. For the entire year, the San Diego International Airport reported 7.83 inches of precipitation, which is 2.51 inches below normal. A number of heatwaves in August and September stressed the electric grid, not only in the San Diego area but throughout the state. On Aug. 14 and 15, California experienced its first set of rotating blackouts since 2001 and a short time later, more hot weather nearly triggered two more rounds of statewide outages.