On Friday, Feb. 25, SDG&E’s parent company, Sempra Energy, reported $2.6 billion in adjusted earnings for 2021.
It’s not a stretch to say that San Diegans – with the highest electrical rates in the country – have been generously helping the energy giant make its profits.
Sempra’s adjusted earnings of $2.6 billion for 2021 include income from all its companies. SDG&E’s earnings for 2021 were reported as $819 million.
The local CBS affiliate asked Alan Gin, a professor of economics at the University of San Diego, to take a look at Sempra’s recent earnings report. His response:
“Well, I think consumers are probably going to be unhappy because they’re paying these increased rates, the highest in the nation actually. And, yet, the company is taking that and then giving it out as dividends to their shareholders, and they’re also using it to repurchase stock, which is benefiting the shareholders as opposed to the customers.”
Currently, SDG&E’s return on equity is 10.2 percent, as approved by the California Public Utilities Commission (CPUC). “It strikes me as, as kind of high,” said Gin.
“Utilities are regulated and so they are allowed to earn a certain return based on their capital and, in the past, that has sometimes led utilities to sort of game the system by expanding a lot on capital and then trying to get a return.”
A local group critical of the high rates has pounced on these reportings. Public Power San Diego, a coalition of groups and individuals who believe non-profit utilities can provide greater democracy and the lowest possible rates, slammed SDG&E in a press statement:
San Diego Gas & Electric (SDG&E) today gave more than 800 million reasons why area residents pay the highest utility rates in the nation: It’s their profits.
The local utility said last year it earned $819 million. Those profits include $1 million each day from customers in the City of San Diego alone, which comprises less than half of SDG&E’s customer base.
The profit windfall continues a more than decade-long trend of strong earnings for SDG&E, a trend that occurred as the cost to its utility customers rose to the nation’s highest level.
Here is the rest of Public Power SD’s statement (you won’t be reading it in the U-T):
“SDG&E has shown where much of the money we pay in those high rates is going,” said Jerry Wanetick, co-chair of Public Power San Diego (PPSD).
“The money goes from our pockets to SDG&E’s bottom line. There’s a better way to provide gas and electric service to the people of San Diego – an independent, non-profit public utility.”
Non-profit utilities already provide gas and electric service to about 25 percent of Californians. These utilities differ in structure from one another, but share a key characteristic: They all have much lower rates than SDG&E, including utility customers in Sacramento who pay less than half what San Diegans pay for electricity.
Under its charter, the City of San Diego retains the legal right to organize a non-profit utility at any time.
“The City Council can start moving in the right direction by harnessing the enormous public interest in non-profit utilities and form a task force of informed citizens to study alternatives to SDG&E,” said Craig Rose, a member of PPSD.
“The task force can help shape and direct a serious study regarding our options, compared with continuing to suffer from SDG&E’s high rates and huge profits.”
The City of San Diego recently allocated $1 million for a public power study. Mayor Todd Gloria’s staff wrote the request for proposals (RFP) to conduct this study. The mayor last year declined to explore the city’s options to form a non-profit public utility before the City Council approved a new 20-year franchise deal. To note just one shortcoming in the mayor’s RFP, the proposal fails to include a requirement for research into forming an independent, non-profit utility, with an elected governing board, separate from city government.
The City should withdraw the mayor’s request for proposals to study non-profit power, in order to allow a citizen task force to review and, if necessary, suggest changes to the proposed study.
“We don’t want to waste $1 million for a study that doesn’t do what we need it to do,” said Wanetick. “We need a study that considers all of our public utility options, and gives us a real alternative to paying the highest utility rates in the country.”
State regulators set the rates that SDG&E charges customers. But SDG&E’s authority to provide service in San Diego is granted by the City Council, which last year approved a 20-year franchise for the utility to continue providing gas and electricity to the City.
Six of nine Councilmembers approved the SDG&E franchise deal, which was endorsed by the mayor. Councilmembers Vivian Moreno, Monica Montgomery Steppe and Joe La Cava voted against the agreement.
“The council had alternatives to SDG&E last June and, under the City’s charter, the council has alternatives now,” said Rose.
More on Public Power San Diego visit their website at https://www.publicpowersd.org
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Once again & in perpetuity the kleptocracy transfers wealth from us to them.
“Some people say . . .” (Dirt bag Bill O’Reilly) there once was a mythical and medieval practice called jus primae noctis where the lord of the realm retained the right to have sex with a new bride on her first night of marriage; well, we all are the maiden & we’re getting screwed every single day of the year by these dirt bag capitalists.
As a protest to their high rates, I won’t be taking a hot shower for a week.
(No problem; I live alone.)
Speaking of dirt bags, I hear Dirt Bag Billy Bob Tucker Bowtie Carlson, the right’s biggest bigot with a flatulent spigot will be appearing with his mouth
at the San Marcos cult of the Awakening Church, (I use the progressive participle because they have yet to become aware or awake.) Times of San Diego reports that it will appear to flatulate towards the congregation in April.
These articles are so dumb and uninformed. If the CPUC is setting the rates that SDG&E can charge, why aren’t they catching any grief? SDG&E simply charges the rates allowable. The rates do not fluctuate because of poor earnings, etc., which is what consumers believe. The City of San Diego can barely handle its tasks now, and you believe they should take on the task of running a utility? Lord help us. It would be a disaster.