Despite public dismay at unusually high natural gas prices this winter, utilities on Monday tried to justify a proposal to generate nearly $5 billion in additional revenue from customers over the next four years.
Southern California Gas Co. said it was “having a very difficult time discussing this request”. and Dan Skopec, CEO of San Diego Gas & Electric, said at a public hearing by the California Public Utilities Commission that the additional money will be needed for infrastructure improvements.
The two utilities serve about 25 million customers in Southern California, from Visalia and San Luis Obispo in the north to the Mexican border in the south.
“There is never a good time to request rate increases,” Skopec said, but the rate increases will help prevent future supply problems. He also claimed that this winter’s price increase was due to high wholesale costs that were “out of our control”.
SoCalGas’ filing, filed with CPUC in May, calls for $767 million in additional revenue by 2024, an increase of more than 20% over projected revenue this year.
After the following year, the proposal would increase utility revenues by “$292 million (6.6%) in 2025, $267 million (5.6%) in 2026 and $413 million (January 0.3%) in 2027 “. The sum of all increases over four years would be $4.9 billion.
Constance Slider Pierre, organizational director at Utility Reform Network, a nonprofit consumer advocacy organization, spoke out against the proposed rate increases.
The proposal, she said, was “unacceptable” and would make it more difficult for gas customers to recover from recent price hikes. By 2027, she estimates customers will pay an additional $264 per year for natural gas if sales increases are approved.
Higher prices would “disproportionately affect low-income families,” Pierre argued, noting that Sempra Energy, the parent company of SoCalGas and SDG&E, will make more than $2 billion in profits by 2022.
SoCalGas, meanwhile, noted that it has provided about $10 million in assistance to low-income families, senior citizens and small restaurant owners through programs such as the Gas Assistance Fund. But Pierre pointed out that the aid made up “less than half a percent” of Sempra’s profits last year.
After a series of hearings and negotiations over the coming months, the CPUC, which regulates utilities, will make a decision on how much revenue SoCalGas – and SDG&E, which have been filed at the same time – can generate.
Consumer advocates and frustrated customers filed nearly 500 public statements for the hearing.
Several callers appeared to be reading scripts on behalf of corporate groups that supported the rate hikes, but most of the callers were taxpayers still angry with SoCalGas after huge bills this winter and baffled that the company still wants more.
A Menifee senior said her Social Security payments were not covering her large bills. “I can’t afford to heat my house” when it’s cold, she said.
A resident of a low-income senior center in Moreno Valley said gas and electricity already eat up money, accounting for half his rent.
“We can’t afford any more increases,” he said. “We are busy.”
Source: LA Times
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