UPDATED 11/16/11 - In a Commission decision dated 11/10/11, the Commission granted part of UCAN's Smart Meter Opt Out Proposal. Here's a link to the actual decision, as well as the text of the decision summary:

This decision grants in part the application of Utility Consumers' Action Network (UCAN). San Diego Gas & Electric Company is directed to file a proposal for Commission consideration that would provide an alternative to customers who do not wish to have a smart meter with wireless radio transmission. This proposal shall be filed no later than 14 days after the effective date of this decision. We deny UCAN's request to modify Decision 07-04-043, as we find such modification unnecessary. This proceeding remains open to consider the opt-out proposals.

Score one for consumers!

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We get a steady stream of calls from concerned citizens about where SDG&E is with their Smart Meter policy.  The CPUC recently met with the California energy utilities to discuss the Smart Meter opt-out option that UCAN brought to them in March.  Here’s a brief update of where they are in the process.

The million dollar question is “When will I be able to opt out of a Smart Meter?”  The absolute earliest would be the end of September 2011.

On July 27, the CPUC and utilities met and discussed what opt out options would look like.  As of now, it looks like it will include these three general options: (1) turn off the wireless transmission capability on existing Smart Meters, (2) Retain analog meters where a smart meter has not yet been installed, and (3) install a digital meter with wired transmission instead of wireless transmission.

The CPUC requested that the utilities file more detailed opt out proposals by August 19, to be discussed at a workshop on September 14.  If you’d like more information on the topic you can read the CPUC ruling here.

Fairness. It is a fundamental question in our society. How we operate, how we live, often comes down to a question of what is fair. What does fairness have to do with SDG&E request for $1.5 billion “general rate” increase? Everything. After a year-long investigation by UCAN’s team of experts have found that over the last years SDG&E’s rates have skyrocketed, its profits soared, and its executives reaped large bonuses all while its customers suffered through the worst recession since 1929. Sound fair yet?

SDG&E claims that increasing costs of doing business necessitates $1.5 billion more of its customers’ money. For 2012, the increase would start at $168 million and grow over the following three years. UCAN and its team of experts poured through SDG&E’s books and reached an entirely different conclusion. Not only does SDG&E not need more money, in fact, it could actually use less money than it currently collects.

UCAN was able to document $142 million in inflated costs, which if adopted would pare back the rate increase to $26 million. When we pair this with large potential cost savings, as much as $200 million in reduction, found by the regulatory staff at the CPUC the math says there should be a rate reduction.

So here is that question of fairness. While customers are in the midst of the worst recession in many of our lifetimes, should ratepayers be funding SDG&E’s wish list of expenditures or should state regulators actually reel in SDG&E’s spending to meet its actual need and spare its customers significantly increased costs?

Now you may be asking yourself how SDG&E concluded its needs a $1.5 billion rate increase in 2012 while UCAN concluded SDG&E could actually use a rate reduction. Through its year-long investigation UCAN’s team of experts uncovered an amount of budgetary mischief that exceeds anything UCAN has witnessed in the past 25 years. So much in fact, that UCAN has called upon the Commission to reevaluate the General Rate Case process. Here is just a small sampling of what our experts uncovered:

• In almost every single operational department, SDG&E's bonus-happy managers have found reasons to increase their annual budgets. The only department with a substantial decrease: meter reading. That’s only because there are no more meter readers due to the $578 million spent on installing smart meters. SDG&E then inflated costs in almost every operating account, after reducing costs the previous year, through use of a five-year average.

• SDG&E overstated operational challenges, if not dangers, that it claims require massive infusions of money

• It manipulated forecast data developed by others in order to achieve outcomes that are more favorable.

• SDG&E sought incentive ratemaking treatment for performance that is marginally competent and created employee incentive programs that disproportionately award suboptimal performance. SDG&E also issued to its employees 517 American Express Travel cards from 2008-2010. In the 2008-2009 time period, charges on this card increased from $693,379 to $1,024,979, or over 45% in just one-year’s time.

• SDG&E only offered cursory justifications for most increases, thus requiring an extensive and time-consuming discovery process for every account. UCAN had to pose 72 sets of data requests containing over 5000 questions and, in many cases, never secured complete answers. One glaring example was its failure to detail its over $6 million in public affairs expenses, despite the CPUC requiring SDG&E to provide “a more detailed justification for all public affairs and outreach expense to demonstrate genuine customer benefit that outweighs any incidental corporate image enhancement."

• SDG&E disregarded commitments made (and directives given) in the previous GRC and using its discretion to fund projects that it had reason to believe the Commission would not have approved

• And it resisted any cost-effectiveness analysis for major initiatives.

These mischievous tactics did not prevent UCAN’s experts from uncovering numerous examples of excessive or unnecessary expenses and other disturbing findings including:

• Two of UCAN's analysis teams found that SDG&E management slashed spending at the company during 2009 and 2010. However, the increased net profits caused by the under spending was directed towards increasing executive bonuses and inflating shareholder returns. Not a dime of it went to lower rates. And now, SDG&E is asking for double-digit increases above the rate of inflation in many cost categories, including the very operational expenses that management cut in 2010. It is asking for those increases across the organization rather than in a select number of accounts to guard against regulatory focus on any one aspect of its operation.

• Since 2008, SDG&E’s system average rates have leapfrogged to the highest in the continental United States and the highest in California, by more than 15%. Where just five years ago SDG&E's rates were about the same as the other California utilities, now we are higher by double-digits in the midst of a full-blown recession. As of 2011, SDG&E's residential average rates are 18.4 cents per kWhr.

• SDG&E's residential customers are currently paying 13% more than SCE customers and almost 15% more than PG&E customers. Notably, at the last rate case in 2008, the residential rates for all three utilities were just about the same (15.6 for SDG&E, 15.0 for both SCE and PG&E).

• Only after the 2008 SDG&E GRC decision, did SDG&E's rates jump well above California's other two energy utilities while SDG&E reaped record profits and management bonuses.

• It wants $83 million to “help” customers who buy electric cars and for burdens caused by customers who use solar to generate their own power. UCAN's experts have found that electric car customers do not need SDG&E's help and that solar panels help SDG&E's system, not burden it.

• SDG&E seeks $13 million to place power lines underground to make them less susceptible to fires. A number of the proposed undergrounding projects however are not located in fire-prone areas.

• SDG&E proposes to need $7.1 million to "fire proof" a transmission line to Mount Laguna. Mount Laguna has 32 households suggesting SDG&E wants to “fire proof” that transmission line at a cost of $221,875 per house.

• SDG&E wants $6.9 million to place solar panel installations its SDG&E properties. But SDG&E's version of solar PV is so expensive that it will take 53 years to pay it back.

UCAN’s experts in addition to its numerous findings made a series of recommendations that support its conclusion for a rate reduction rather than yet another rate hike for SDG&E. Here is just a sampling of those recommendations.

• SDG&E should be compelled to maintain internal data to help gauge the effect of IVR on overall customer service quality. This includes tracking average time of an IVR call and average total call to time to CSRs (including IVR).

• SDG&E should also take steps during this period to evaluate the cost-effectiveness of implementing Internet based services for customer support.

• Rather than continue to spend millions on a project that its own data suggests will not improve interactions with customers, SDG&E be required to implement Internet-based alternatives. A corresponding reduction in IVR expenditures is made in the Testimony of William Marcus on behalf of UCAN.

• SDG&E should transform its call center into a contact center planning to utilize web efficiencies to improve the customer experience.

• SDG&E should be investing in Live Chat functions, E-mail with Artificial Intelligence, a function for helping consumers find a rate plan that fits their needs, and online customer surveys.

• Commission should not fund vague project to increase spending on social media without a more compelling showing that adoption of social media will enhance its customer service and reduce its customer outreach costs.

• Allocation of Sempra lobbying costs assigned to SDG&E must be cut in half to better reflect the lobbying specifically done on SDG&E‘s behalf.

• The Commission should prevent SDG&E from using ratepayer funding to engage in corporate image enhancement, promotion of SDG&E political initiatives, or the purchase of giveaway items by imposing a disallowance and should renew its justification requirement that it set forth in the 2008TY General Rate Case.

• Disallows 50% of all of SDG&E forecast travel costs. SDG&E's failure to document its travel expenditures justifies that shareholders share in the costs of all travel for which ratepayer funding is sought.

• Disallow all dues paid to Chambers of Commerce.

• Disallow costs for memberships, dues, or contributions to organization whose work involves political lobbying or advocacy and where SDG&E has not met its burden of showing a clear and specific benefit to ratepayer.

• UCAN recommends that SDG&E be obligated to split the costs of the service guarantee program with shareholders until the next GRC TY, at which time, if it provides details of these costs, the program might, once again, be fully funded by ratepayers.

• UCAN recommends a reduction in funding of $994,000 in the administrative programs supporting Clean Energy Program initiatives.

• The Commission should deny a $2.23 million increase to Electric Clean Transportation project.

• Reject future funding for the Energy Innovation Center also known as the San Diego Energy & Environment Center and to disallow expenditures of at least $2.4 million for monies already spent on this Center.

To read all of the finding and recommendation of UCAN’s team of experts see UCAN’s published testimony available at http://www.ucan.org/energy/electricity/general_rate_case_2012/ucan_testi...

Despite these findings of UCAN and the potential cost reductions found by the CPUC staff, it may not be enough to convince the Commission to not grant SDG&E’s wish list of expenses. SDG&E’s customers need to take advantage of the opportunity to give regulators a piece of their minds during the week of October 10th. During that week, there will be eight public hearings throughout the County. The regulatory agency that will make the final decision on SDG&E's rates will be taking public input on the proposed rate increase. Hearings will be held in San Diego, Chula Vista, El Cajon and Oceanside.

If you can afford a 5-7% rate increase locked in for the next four years, then you needn't do anything but sit on a couch and wave goodbye to your money. But if you feel that you simply cannot afford higher gas and electric prices at the moment, you need to make your feelings known at the upcoming public hearings held at 2pm and 7pm at each of the four locations:

• San Diego: October 10, 2011 (Al Bahr Shriners Center, 5440 Kearny Mesa Road, San Diego 92111)

• Chula Vista: October 11, 2011 (Comfort Inn & Suites, 632 E. St., Chula Vista 91910)

• El Cajon: October 12, 2011 (El Cajon City Hall Council Chambers, 200 E. Main St, El Cajon 92020)

• Oceanside: October 13, 2011 (Civic Center Library, 330 N. Coast Highway, Oceanside 92054)

We figured it would happen, we just didn't realize it would happen so soon!

According to a news article on NBC San Diego's website, a pair of local businessmen filed a class action lawsuit against SDG&E on September 12. This was just four days after what our Executive Director Michael Shames deemed to be one of the nation's first 21st century blackouts. The businessmen also filed suit against Arizona Public Service, the entity SDG&E is pointing its finger at for the blame of this eclipsing event. 

While the article did say that the businessmen, Antonino Busalacchi and Baba Foods owner Anis Ben Adj Yahia, filed a class action suit, the article did not give many specifics about the complaint. The only real tidbit given was that the businessowners filed suit in federal court.

SDG&E's Claims Process

In the wake of the blackout, many people including the outraged owners are feeling the pain of rebuying spoiled foods and replacing fried electronics. SDG&E is accepting claims for food losses and other damages caused by the blackout, it sounds like SDG&E won't make a decision on those claims until its finalized its own investigation (see this article in the UT). 

In spite of this, you should still file a claim with SDG&E if you feel that you've suffered any property loss from the blackout. 

As always, keep checking back to our website for more updates on the September 2011 blackout. Let us know what you think about SDG&E and its response to the blackout in the comments. Have an issue with your SDG&E bill or other utility bill? File an online complaint form and one of our Fraud Squad advocates will review your issue.

If you’ve been following our blog you know that we’re getting closer and closer to having an opt out option for SDG&E Smart Meters. The next few months will be a critical time for the CPUC to decide exactly what these opt out policies will look like and how far reaching they will be.

At UCAN, we want to make sure that the CPUC understands how many consumers are concerned about Smart Meters. One of the biggest frustrations is that it doesn’t seem that SDG&E is keeping a list of customers that want to opt out.

We want to make sure your voices are heard, so we’re compiling lists of SDG&E customers that want to opt out of their Smart Meter. By doing this we can give the CPUC a snapshot of the vast numbers of consumers concerned about Smart Meters.

If you are an SDG&E customer and you want to opt out of a Smart Meter, let us know! First, contact SDG&E (1-800-411-7343) and tell them you want to get on their delay list. Send an email to optout@ucan.org with the following information:

(1) Your first and last name

(2) Your SDG&E account number

(3) If you currently have a Smart Meter installed (Y/N)

We’ll keep you updated as the opt out workshops proceed.