Bills will increase more for customers near coast

Most of that, almost 4.3 percent, reflects an increase in SDG&E's base rate that was part of a general rate case that the California Public Utilities Commission approved on July 31.

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The other 2.7 percent reflects increased electricity-transmission costs in an unrelated rate case approved by the Federal Energy Regulatory Commission, said Lee Schavrien, SDG&E's senior vice president for regulatory affairs.

The combined effects of both rulings will increase the average homeowner's electric bill by less than $5 a month, SDG&E officials said. A typical natural gas customer will see their monthly bill rise by 33 cents.

Customers can expect to see substantial differences in their bills, however, depending on a variety of factors, including the type of customer, how much electricity they use and where they are located.

The state decision in SDG&E's general rate case ended a regulatory process that began 20 months ago when the utility filed a 9,000-page application to raise its base rates for both electric and natural gas customers.

The state commission decided to combine SDG&E's general rate case with a similar filing by Southern California Gas, a natural gas utility also owned by San Diego-based Sempra Energy.

SDG&E explained in its case that revenue increases were needed to cover the rising cost of operating its gas and electric distribution systems, including maintenance and certain capital improvements.

SDG&E essentially told regulators it needed an additional $230 million a year to cover its higher operating costs, or a total of $1.38 billion in additional revenue over a six-year period.

Consumer groups and the state Division of Ratepayer Advocates opposed parts of that request and negotiated a settlement that allows the utility to get approximately $800 million in additional revenue over a four-year period.

The settlement, which was approved by the commission two weeks ago, enables SDG&E to increase its gas and electric rates to generate an additional $136.3 million in 2008. The new rates are retroactive to Jan. 1. SDG&E has been allowed to collect an approximate increase for nearly eight months and hold the proceeds in a separate account pending the PUC decision.

The settlement also provides for an annual increase that allows SDG&E to make successive annual base-rate hikes of $41 million in 2009; an additional $44 million in 2010; and $44 million more in 2011.

That means the utility will make adjustments to its base rates for residential, commercial and industrial customers every year.

SDG&E detailed its planned changes for this year in a so-called advice letter submitted to the commission late Monday.

Under the changes for 2008, a typical residential customer who lives east of Interstate 15 and uses 500 kilowatt hours of electricity a month will see their electric bill increase by about $1.59, from $70.51 to $72.11, said SDG&E spokeswoman Denise King.

A typical coastal homeowner who uses 500 kilowatt hours a month will see their bill jump by about $4.75, from $75.78 to $80.52. The utility charges a slightly higher base rate to recover its slightly higher costs among coastal customers, who generally use less electricity to cool their homes.

These increases do not amount to a 7 percent hike for what the utility describes as a typical residential customer. But SDG&E estimates that the overall rate increase will amount to a 7 percent hike because the utility charges substantially more for customers who use more than 450 kilowatt hours a month, Schavrien said.

Residential customers who use 16 therms of natural gas a month can expect their monthly bill to increase by about 33 cents, from $23.36 to $23.69.

In the SoCalGas case, the commission decided to reduce the utility's revenue requirement by $28 million, or 1.7 percent.

As a result, a typical residential customer who uses 32 therms of natural gas will see a decrease in their monthly bill of about 30 cents, or less than 1 percent, from $47.26 to $46.97.

SoCalGas is the nation's largest natural gas distribution utility, providing natural gas to 5.7 million customers in Southern California, except San Diego County.

SDG&E provides electricity to 1.4 million electric customers and more than 840,000 natural gas meters in San Diego and southern Orange counties.

Bruce Bigelow: (619) 293-1314; bruce.bigelow@uniontrib.com