SDG&E & Edison Execs to Profit from Elimination of Conservation Incentives
June 16, 2015, San Francisco–SDG&E executives are desperate for CPUC approval of fixed charges for residential customers, which would allow the company to bill customers a set amount every month, even if they use no electricity at all. A CPUC Proposed Decision issued under the direction of President Michael Picker endorsing fixed charges of up to $10/month has met with howls of protests from a coalition of ratepayer advocates, environmental groups and solar interests who want to continue the current rate structure that rewards conservation and keeps bills more affordable for moderate users. After the initial Proposed Decision was issued, Commissioner Michel Florio released an alternate proposal that, if adopted, would affirmatively reject SDG&E’s proposals for new fixed charges.
Seeing a potential defeat ahead, SDG&E CEO Jeff Martin penned an anxious letter to the CPUC that failed to disclose Martin’s potential financial windfall if SDG&E is successful. TURN recently obtained internal documents revealing that SDG&E executives, most of whom already receive millions in pay and perks, will be rewarded with additional bonuses if they are able to successfully push the changes SDG&E wants through the CPUC. These fixed charges, combined with the time-based rates SDG&E also wants, are designed to give energy hogs a break at the expense of everyone else. Approximately 75% of residential customers will see higher bills if SDG&E’s proposals are approved.
TURN staff attorney Matt Freedman criticized Martin’s failure to disclose the bonuses. “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.” Freedman noted that SoCal Edison executives also stand to collect additional payouts if their lobbying and regulatory campaign for fixed charges is successful.
The CPUC allows SDG&E to charge customers about $35 million per year for executive bonuses, on top of the six and seven figure salaries and lavish benefits SDG&E’s top brass already receive. “The fixed charges SDG&E wants won’t just keep money rolling in regardless of how much customers use, but will also further inflate executive pay at SDG&E,” Freedman said. “SDG&E is using every tool at its disposal, including customers’ money, to push through a plan that will give a few energy hogs a break at everyone else’s expense.”
TURN supports the alternate proposal by Commissioner Florio that would deny the fixed charges but adjust the number of tiers and differences between them, providing slightly lower bills for high end users while maintaining more affordable bills for moderate usage customers and retaining strong conservation incentives.