Despite public outcry over unusually high natural gas prices this winter, utility executives on Monday sought to justify a proposal to generate nearly $5 billion in additional revenue from customers over the next four years.
Saying it was “a very difficult time to discuss this application,” Dan Skopec, director of Southern California Gas Co. and San Diego Gas & Electric, told a California Public Utilities Commission public hearing that additional money was needed for infrastructure improvements.
The two utilities serve approximately 25 million customers in Southern California, from Visalia and San Luis Obispo in the north to the Mexican border in the south.
“There’s never a good time to ask for rate increases,” Skopec said, but rate increases would help prevent future supply problems. He also argued that soaring prices this winter was due to high wholesale costs that were “out of our control”.
SoCalGas’ application, submitted in May to the CPUC, calls for $767 million in additional revenue in 2024, an increase of more than 20% over projected revenue for that year.
After next year, utility revenue would increase by “$292 million (6.6%) in 2025, $267 million (5.6%) in 2026 and $413 million (8.3%) in 2027,” according to the proposal. The sum of all increases would be $4.9 billion over four years.
Constance Slider Pierre, organizing director at the 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 difficult for gas customers to recover from recent price spikes. According to his estimate, customers would pay $264 more per year for natural gas by 2027 if revenue increases were approved.
Higher prices “would disproportionately affect low-income families,” Pierre argued, noting that Sempra Energy, the parent company of SoCalGas and SDG&E, made more than $2 billion in profits in 2022.
SoCalGas, meanwhile, noted that it has provided about $10 million in assistance to low-income families, seniors and small restaurateurs through programs such as the Gas Assistance Fund. But Pierre pointed out that the aid represents “less than half a percent” of Sempra’s profits last year.
After a series of hearings and negotiations over the next few months, the CPUC, which regulates utilities, will issue a ruling on how much SoCalGas — and SDG&E, which filed concurrently — will be able to raise. income.
Consumer advocates and frustrated customers submitted nearly 500 public comments for the hearing.
Several callers appeared to read scripts on behalf of business groups supporting rate increases, but most callers were ratepayers who were still angry with SoCalGas after high bills this winter and puzzled that the company still wanted more. more.
A senior from Menifee said his Social Security payments would not cover his high bills. “I can’t afford to have heating in my house” when it’s cold, she says.
A resident of a low-income seniors’ center in the Moreno Valley said gas and electricity are already costing him money, totaling half of his rent.
“There’s no way we can afford any more increases,” he said. “We are exhausted.”