Sempra Utilities Settle to Avoid Annual Cost Hearings

By Published On: July 24, 2004

Southern California Gas and San Diego Gas & Electric said they would agree to a consumer price index formula for raising revenues beginning in 2005 instead of going to the California Public Utilities Commission for annual cost-of-capital hearings. The settlement among the Aglet Consumer Alliance, The Utility Reform Network, the Natural Resources Defense Council, the Office of Ratepayer Advocates, and others, announced July 22, allows the utilities to avoid general rate case filings for four more years. ?The settlement agreement represents a tough bargain,? stated the parties. They noted that two weeks of hearings had already been conducted in the case. The settlement is a compromise between those who wanted the utilities? base year, or ?test year,? to be 2009 and those who wanted it to be as early as 2006. They agreed that the utilities would file general rate case applications in 2008. In CPUC general rate case proceedings, utilities have to bare much of their decision making, bookkeeping, and expectations. Regulators look over the utilities? shoulders to see whether they are operating in the public interest and deserving of ratepayer investments. Utilities? plans can be picked apart and/or downscaled, as recently happened with Southern California Edison when the commission halved the utility?s rate increase request (<i>Circuit</i>, July 9, 2004).

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