Despite public outcry over unusually high natural gas prices this winter, utility executives sought Monday 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 request,” Southern California Gas Co. and San Diego Gas & Electric executive Dan Skopec said during a public hearing of the California Public Utilities Commission that the extra money was necessary for infrastructure improvements.
The two utilities serve about 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 request rate increases,” Skopec said, but the rate increases would help prevent future supply issues. He also maintained that this winter’s price spike was due to high wholesale costs that were “beyond 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% from this year’s expected revenue.
After next year, revenue for the utility would go up “$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, an organizing director at the Utility Reform Network, a consumer advocacy nonprofit, 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 surges. By her estimate, customers would pay an additional $264 per year on natural gas by 2027 if the revenue hikes were approved.
Higher prices would “disproportionally affect low-income families,” Pierre argued, noting that Sempra Energy, the parent company of SoCalGas and SDG&E, made more than $2 billion in profit in 2022.
SoCalGas, meanwhile, noted that it had offered about $10 million in aid to low-income families, seniors and small restaurant owners 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 decision on how much SoCalGas — and SDG&E, which filed concurrently — will be able to increase revenues.
Consumer advocates and frustrated customers submitted nearly 500 public comments for the hearing.
Several callers appeared to read from scripts on behalf of business groups supporting the rate increases, but most callers were ratepayers who were still angry with SoCalGas after high bills this winter and flummoxed that the company wanted even more.
A senior citizen from Menifee said her Social Security payments would not cover her high bills. “I cannot afford to have heat on in my house” when it’s cold, she said.
A resident of a low-income senior center in Moreno Valley said that gas and electricity are already eating up money, totaling half of his rent.
“There’s no way we can afford any more increases,” he said. “We’re tapped out.”
Terry Castleman
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