SDG&E Wants Smaller Piece of DWR Revenue Pie

By Published On: February 1, 2013

Regulators’ annual allocation of the Department of Water Resources’ costs of the energy crisis contracts among the three investor-owned utilities is a bumpy ride. The California Public Utilities Commission’s proposal dividing DWR’s 2013 tab of $861 million from the state’s few remaining long-term deals has San Diego Gas & Electric paying the leftover costs of the gas transmission deal with Kern for the Sunrise plant. The project contract, which expired at the end of last year, was put into the utility’s portfolio by the department via “novation” in the last decade. The department’s revenue requirement components, which are passed on to the utility ratepayers, include power and bond charges. The agency would return $48 million to Pacific Gas & Electric customers, $81 million to Southern California Edison ratepayers, while charging SDG&E ratepayers $3 million, according to the pending proposal by administrative law judge Seaneen Wilson. “This results in a reduction to the power charges allocated to PG&E’s electric customers of approximately $26 million, a reduction to the power charges allocated to SCE’s customers of approximately $70 million, and power charges allocated to SDG&E’s electric customers of approximately $36 million.” In a brief filed Jan. 9, SDG&E objects to the regulatory proposal, insisting the cost of the gas transmission deal should be split among it and the much larger PG&E and Edison. The other two utilities disagree, insisting San Diego has been the sole beneficiary of the gas agreement. “PG&E is aware of no precedent for SDG&E’s claims that the commission should now reallocate obligations under a contract that has been previously assigned entirely to one utility. SDG&E’s apparent theory that this assignment of rights and obligations should now be revisited runs directly counter to this precedent and should be rejected.” DWR’s role is limited to submitting its yearly bill for the legacy energy crisis-era contracts. The agency took over procuring power for utilities when the state’s deregulated market fell into disarray and economic urgency in 2000-01.

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