Susan Luzzaro 5:30 p.m., Dec. 7
San Diego residential power customers and small businesses are facing hard times in this economy, and a big part of that problem for the foreseeable future can be found in two rate proposals by San Diego Gas and Electric Company (SDG&E). Sempra Energy's SDG&E is the City of San Diego electricity franchisee that pays merely three percent of gross receipts to the City of San Diego as its annual franchise fee under an agreement with City Council members dating back to 1970. In return for that fee, the California Public Utilities Commission grants Sempra Energy the right of a utility holding company to take its share of SDG&E profits, profits that CPUC recognizes could have been put to use by SDG&E if it did not have to turn that money over to Sempra Energy. (See INTERIM OPINION ON MEANING OF FIRST PRIORITY CONDITION below)
The first of the SDG&E proposals is actually part of a joint application to CPUC by Southern California Edison components, Pacific Gas & Electric Company, and SDG&E (known as investor owned utilities or IOUs to CPUC). Under the joint application, SDG&E and the other named utilities are seeking authority to bill customers for utility uninsured wildfire legal expenses and other utility uninsured wildfire costs. The Wildfire Expense Balancing Account (WEBA) application is opposed by two CPUC divisions, the Division of Ratepayer Analysts (CPUC DRA) and the Consumer Protection and Safety Division (CPUC CPSD). DRA and CPSD oppose WEBA for a number of reasons, but two stand out: (1) WEBA is an open-ended consumer liability for wildfires that utilities will not or cannot get insured, and (2) there is no reasonableness test to prevent utility negligence from driving costs up for consumers through those WEBA billings to customers. (See RULING OF THE ASSIGNED COMMISSIONER AND ADMINISTRATIVE LAW JUDGE DIRECTING APPLICANTS TO AMEND... below)
The second SDG&E proposal is the PeakShift at Work (PSW targeted at small businesses) and PeakShift at Home (PSH for residential customers) to provide a cost-incentive through higher business hour rates, so that residential renters, homeowners and small businesses reduce energy consumption during business hours in favor of using power at night or on weekends. Plainly, this makes small businesses less competitive during ordinary business hours than larger SDG&E industrial-sized customers. (See APPLICATION OF SAN DIEGO GAS & ELECTRIC COMPANY (U 902 E)... below) About the only thing residents and small business owners can do if we want to not pay peak electricity rates during the day is to generate our own off-grid power to use on our own and maybe share cooperatively with our neighbors. It only adds insult to injury that SDG&E wants us to pay $118 million to SDG&E for its advertising to us what a good deal PSW/PSH is for Sempra Energy shareholders.
There are political considerations here. Earlier this year, PG&E spent over $30 million in advertising support for its constitutional amendment proposal, Proposition 16. It lost, demonstrating that power utilities are not automatic winners whenever they have to face voters in an open election. After all, a public election is a much different venue than meeting with CPUC commissioners over dinner at a San Francisco premium jazz club or in a Hawaiian spa and resort, something previously revealed and discussed by the Turko Files.
Our City Council members are scrambling to add a sales tax increase to the November ballot, but none of them is on the record about SDG&E 3% annual franchise fee. If that fee were raised to 20% until all of the power lines were underground in San Diego County, then both Sempra Energy and SDG&E would have the proper incentive to get that job done, make us safer from wildfires, and restore some sense of order to the City/franchisee arrangement.
If our City Council members are not up to the job of closing that $70 million a year budget deficit, then maybe it is time for the voters to have their say in approving a new contingent franchise fee until the job gets done.