Conserving Electricity Not Necessarily Helping Lower SDG&E Bills

NBC 7 sat down for an exclusive interview with the utility to talk about a recent rate hike and other factors that led to large bill increases for thousands of customers

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In January, a new rate increase took effect at SDG&E. That same month, customers all over the county saw a large increase in their bills. Now some lawmakers are demanding answers.

"When I saw my bill much higher than it usually was, it really was unexpected," said Assemblymember Brian Maienschein who represents California's 77th district. "It left me, like most people, sitting there wondering why this happened."

Maienschein sent a letter to California's Public Utility Commission asking why rates went up and how customers were caught off guard.

"This is a rare occurrence for this to occur in the wintertime and there's really one primary driver, and that's the cost of natural gas," said Scot Crider, Senior Vice President of Customer Service & External Affairs at SDG&E. "Prices were about 25% higher than in January of 2021 and you take it and combine it with the coldest December that we've had in San Diego in 10 years."

The high price of natural gas is something that SDG&E has no control over. The CPUC told NBC 7 those rates are set by the market and customers pay the same rate that SDG&E pays to buy that gas.

Even if you're an electric customer only, the price of natural gas still has an impact.

"Customers use natural gas to heat their water, heat their homes and to cook with," said Crider. "We also use natural gas to generate a lot of electricity that is delivered here to San Diego."

Assemblymember Maienschein says he wants to make sure customers know when to expect higher rates.

“I really want to see the CPUC respond to what caused these rate hikes," said Maienschein. "I want to make sure people have notice as to what’s happening involving their gas and electric bill to make sure this doesn’t happen in the future.”

Crider recognizes that SDG&E should have done more to explain to customers that the price of gas was going up and the surprisingly cold weather would lead to high bills.

"I take personal responsibility for this," said Crider. "I think we could have done a better job communicating with our customers. Especially when we saw that record cold in December and we're going to redouble our efforts to make sure that our customers aren't surprised."

Apart from the price of natural gas, the rate for electricity also increased in January from around 32 cents per kilowatt-hour to 34.5 cents per kilowatt-hour. SDG&E says those increases are used to pay for upgrades to make its system more reliable and safer.

"In 2007 our facilities were involved in a wildfire and we committed to this community that would never happen again," said Crider. "We've invested about $3 billion to ensure that our system is hardened against wildfires. I think in that case the results speak for themselves. We haven't had a utility-caused major wildfire since 2007 as the rest of the state has really been struggling in that area."

San Diego's Utility Consumers' Action Network says there are a number of legitimate reasons the bills are high, but its executive director says the state needs to make sure SDG&E's programs are necessary.

“We need the regulators to take a harder look and to adopt a harder stance in many of these cases," said Edward Lopez, Executive Director of UCAN. "These costs are just unjustifiable, too high and not reasonable.”

SDG&E says its rates are set primarily through a General Rate Case about once every four years. Those proceedings are public and organizations such as UCAN are allowed to critique or give feedback on the cost estimates that SDG&E lays out. Rate increases can also happen when utilities are told by lawmakers and regulators to buy facilities or make changes.

"We've always acknowledged that we have higher rates [than most other utilities]," said Crider. "We also have the lowest average electricity bill in the state. So yes our rates are higher, but our bills are comparably low to the other major utilities in the state."

At the end of February, SDG&E will appear before the PUC to talk about affordability and request assistance from the state and federal government to offset costs.

"One of the things we're hyper-focused on right now is rate reform in California," said Crider. "Customers may feel that's a challenging issue, but the way we're charging for electricity doesn't make sense as we're trying to encourage more electricity use in transportation, in homes, and businesses."

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