San Diego Gas & Electric is raising residential rates because people cut back on their electricity at home.
Every time you turn on a light, SDG&E gets paid. But when you cut back on your electricity the utility company gets less money and that's the problem.
“The Public Utilities Commission (PUC) will set the rate that the utility can charge. We are authorized basically to make a certain amount of money as a part of this process,” said SDG&E spokesperson Stephanie Donovan.
But the money fell short, so SDG&E is raising residential rates more than 2 percent to make up the difference.
“We saw a bad economy. Lots of people probably cut back on their use on electricity and gas simply because they didn't want to run up their bill,” said Donovan.
SDG&E makes their money no matter how much electricity we use.
“In this particular case it looks like the laws of supply and demand just don't work,” said San Diego State business professor Tony Cherin.
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Their rate of return is actually set by the PUC and when that return falls short, the utility can raise its rates to make up for it.
The customer pays, not the utility.
“Why are we as rate users, why are we being beaten to death with this? Why doesn't SDG&E have to do this?” Cherin asked.
We've been told to conserve, but no matter how much you cut back on your electricity, you're still going to have to pay more when you turn on the light. However, if you conserve, even if rates go up, you're still going to pay less than somebody who doesn't conserve.
Donovan says SDG&E is far more likely to refund customers on over charges than ask for a mid correction price hike like this one.
The increase means the average customer will pay $2-$6 more a year.
