SDG&E Fire Insurance

By Published On: September 11, 2009

San Diego Gas & Electric says its fire insurance costs have skyrocketed so that it needs to raise its rates by $29 million to make up the difference. The Sempra Energy-owned utility filed a request with the California Public Utilities Commission last week to increase rates. “All of California’s independently owned utilities are seeing their insurance rise,” Sempra/SDG&E spokeswoman Denise King said. “We’ve seen our rates increase drastically for only a third of the coverage.” King said that fire insurance previously cost the company $10-15 million annually, but it has soared to $40-50 million a year. “If the Public Utilities Commission approves the increase, the typical inland customer’s bill would increase 70 cents a month,” King said. “For coastal customers it would be 23 cents a month.” The proposed increase is a response to investigations that ultimately pointed the finger at SDG&E wires in contributing to three wildfires in 2007. However, Michael Shames of the San Diego-based consumer watchdog group, Utility Consumers’ Action Network, says that the rate increase isn’t merited and that there are other ways to offset the fire insurance increases. “First, it should ask the insurance commissioner to intervene and compel insurance companies to lower their rates and increase their coverage,” he said. “Second, it should attempt to renegotiate the premiums by teaming with other utilities and buying coverage as a group.” Third, Shames said, SDG&E “should be able to demonstrate that its efforts to reduce fire risk need to be recognized in the premiums that they are being charged.” Shames also said that UCAN would file a protest of the rate increase application in the coming days and that it would include more suggestions for offsetting insurance increases without raising rates. SDG&E’s rate increase, if approved, would go into effect June 1, 2010, King said.

Share this story

Not a member yet?

Subscribe Now