By the OGJ Online Staff
HOUSTON, Sept. 14, 2001 – San Diego Gas & Electric Co. endorsed California state regulators’ proposal to use cost-of-service rather than a “postage stamp” approach to allocate the state’s pending electric rate increase.
SDG&E said a postage stamp approach could more than double the size of the increase for its customers. Under the postage stamp approach, electric procurement costs incurred by the Department of Water Resources would have been spread evenly among the utilities and raised SDG&E’s customers rates unfairly, SDG&E said, even though it costs more to deliver power to customers in the northern part of the state.
Earlier this month, Pacific Gas and Electric Co. asked the California Supreme Court to overturn the California Public Utilities Commission decision on interim funding for the DWR, saying it would shift $600 million in unsubstantiated DWR power costs to its customers, from Southern California customers, over the next year.
The San Francisco utility unit of PG&E Corp. said the PUC exceeded the scope of its authority and abused its discretion. Some previous recommendations under consideration by the PUC used a postage stamp approach to allocating the state rate increase.
The DWR has been purchasing electricity for customers of SDG&E since Feb. 7, 2001. The agency has been purchasing power for PG&E and Southern California Edison Co. since the beginning of the year.
The PUC administrative judge’s recommendations took into account the cost differences between different regions in the state, due to factors such as shortages in electric supplies and the condition of the area’s electric delivery transmission system.
The judge also based his decision on the quantities of electricity purchased by the DWR for each region this year and on a projected basis for 2002.
The PUC administrative law judge’s proposed decision sets the revenue requirement DWR must collect from the state’s electric customers. At present, the PUC is simultaneously considering a separate proposed decision for collecting these funds from SDG&E customers based on a tiered rate increase plan.
Under the proposal, low income residential customers, those who rely on physician-ordered medical equipment, and those using 130% or less of their baseline allowance will not experience a rate increase.