SDG&E has submitted its Notice of Intent to File a General Rate Case Application. SDG&E requests that the CPUC authorize a combined $1.851 billion in rates. An unprecendent 7% increase compared to currently effective rates. The filing with the Public Utilities Commission explains why. In the midst of the greatest economic recession in almost a century, SDG&E has requested the largest rate hike in its history. And it wants it to last for four years.

Here are the details according to SDG&E's own documents. The company is seeking to increase electric rates (on average) by 7% and increase its gas rates by 6.9%. The monthly bill impacts would be about 10% (on average) -- 3% for electric customers and 7% for gas service. Because of the way rates are designed, the impacts on residential and small business customers will likely be larger than on big business customers. The utility claims that typical residential customer would see monthly bills go up about 5 percent, by $6.50 or so, to $129 from $122.50.

The details of SDG&E's spending spree is similarly disturbing. The increase SDG&E's basic operations costs (not including production of energy) adds up to are about $123 million per year. SDG&E also wants to increase its capital cost spending by $2.2 billion dollars.

The general rate case filing is composed of some 25,000 pages in which SDG&E justifies how it spends the money it collects from customers in order to run and maintain its towers, pipes, wires, substations, offices and power plants. Active litigation on the application begins in early 2011 and the Commission should issue a final decision sometime near the end of 2011. In the interim, UCAN has begun the process of creating its team of experts to review the 25,000 pages and develop counter recommendations.

To add some black humor to this already tragic story, the local news media couldn't get it straight about what SDG&E was seeking. The Union Tribune printed a story about the rate case in which it identified the rate hike as $246 million. But the story omits the fact that this request would be over four years and would be increased annually by an assumed inflation factor. The North County Times reports that the rate increase would be annual $310 million. It isn't clear as to where the NC Times came up with its higher figure. It also failed to note that over the requested four years, the total increase in rates would exceed $1 billion.

This November's gubernatorial election will directly impact the decision. The governor appoints the five members of the commission, subject to confirmation by the state Senate. The terms of two commission members will expire in early 2011, and the temporary appointment of Commissioner Nancy Ryan could expire before the Senate confirms her. The commission that's going to be judging this next rate case decision may be entirely new set of Commissioners. Depending upon which Governor is elected, that Commission could be made up of truly public interest regulators or continue with the current set of pro-utility regulators. Clearly, SDG&E is banking on the latter.