California’s utility regulators are set to approve plans for Sempra Energy unit San Diego Gas & Electric (SDG&E) to recover hundreds of millions of dollars in wholesale power costs from ratepayers. The utility says it is owed $747 million – the accumulated difference between the price it paid for wholesale power and the amount it was allowed to pass on the consumers during the 2000 power crisis – but has offered to forgo $319 million in order to settle issues in dispute.
SDG&E is the state’s third largest utility and owns 20% of the San Onofre nuclear plant. The largest, Pacific Gas & Electric (PG&E) has sought protection from creditors under bankruptcy law (see NEI May 2001, p3). The second largest, Southern California Edison, has reached a settlement in a lawsuit against the California Public Utilities Commission that will enable it to recover its debts from ratepayers.
SDG&E was not subject to the rate freeze that overwhelmed PG&E and SCE last year and has not been damaged financially. Regulators limited the amount that SDG&E could bill customers after retail rates tripled along with wholesale power prices last summer. The difference between the billing cap and the cost to the customer was set aside in a balancing account that would eventually be passed on to the consumer.
