The Morning Report
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The state auditors have already been investigating San Diego Gas and Electric for shockingly high energy rates since the legislature asked it to back in May. Now the governor wants the feds to step in.
January’s monumental increase in natural gas prices and subsequent drop again in February triggered a response from Gov. Gavin Newsom Monday for the Federal Energy Regulatory Commission to investigate whether market manipulation or anticompetitive behavior among utilities was at play. SDG&E has the highest per-kilowatt hour electric rate in the continental U.S.
Protestors including advocates for a public takeover of the city’s energy grid called on the San Diego City Council to hold its own hearings to probe why SDG&E’s gas prices tripled.
SDG&E spokesman said at the time that the utility understands customers are upset and angry.
“We validate every emotion they are feeling and know that we are in this together. For the customers who are struggling, reach out to us. You don’t have to feel alone. We can help you with a tailored solution to get through this together,” SDG&E spokesman Anthony Wagner told the Union-Tribune.
SDG&E has pointed to a slew of factors that affected the natural gas prices recently including volatility in the global gas market, a spike in demand from a winter cold snap, a pipeline capacity problem in West Texas and low stockpiles of the fossil fuel.
The state investigation into SDG&E’s rates, requested in part by San Diego Assemblymember Tasha Boerner Horvath, who sits on the Joint Committee on Legislative Audit, is slated to wrap-up in March. Newly-elected Assemblyman David Alvarez now chairs that committee.
“As a San Diegan, I am all too aware that we are paying too much for natural gas to heat our homes. We need answers, be it in this audit or the investigation called for by Governor Newsom,” Alvarez said. “As chair of the committee, I will review the report and determine what additional steps and committee hearings would be prudent and bring answers to us in Southern California who are paying exorbitant rates for natural gas.”
Since VOSD prides itself on investigation, look at the SDG&E contract with the city. It commits the company to all sorts of non-electrical expenditures, parks, trees, etc.
The city is using the power company as their very own slush fund for projects in there district. The company doesn’t care, they are guaranteed a 10% profit on all their expenses.
To quote Pogo, “We have met the enemy, and they are us.”
I have lived in San Diego long enough to remember the adage residents used to say – “San Diego owned and operated by SDG&E.”
Why doesn’t SDGE hedge the future gas prices. The airline hedge half their fuel prices to lock in the price.
They basically know how much gas will be used in normal times. So you hedge that price. Then when prices skyrocket like January. You only need to pay higher prices on the added need.
For eample. You pay hedge at $2. Then prices go up to $5. You only pay the $5 on the additional use. You would pay $2 on the usual amount.
Thus the bill would probably average at $3.50 instead of the whole month at $5.
SDG&E already announced that they want to increase prices more than 30% in the next five years. People are not getting those kinds of pay raises. It’s impossible to pay those increases. What the hell is going on?
How much money did David Alvarez take from Sempra and SDG&E when he ran for the state senate. How much will those campaign contributions drive his actions when the new auditors report comes out?
I wonder as well. His comments about “investigating” sure seemed pretty tepid.
Politicians are crafty and side with utilities. It is about electric bills as much as it is about gas. We pay among the highest in electric rates compared to even Texas and highest electric rates across US and California.
The fact we have investor-owned, for-profit utilities is a farce. LADWP customers pay max $0.22/kWh, while SDG&E is to infinity and beyond. Do we get better electricity? Even though LADWP has some serious problems, are they really any worse? We have this whole other layer to pay for: guaranteed dividends, etc. Not only that, but since SDG&E is the smallest utility, we have the highest per-capita cost for infrastructure. All because of the accident of where we live. It sure would be nice if we had some giant entity with deep pockets and no profit motive that can give us some relief…
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