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HomeUSSoCalGas' proposed $4.9-billion revenue hike plan sparks outrage amid soaring bills

SoCalGas’ proposed $4.9-billion revenue hike plan sparks outrage amid soaring bills


Despite public outcry over unusually high natural gas prices this winter, utilities on Monday were seeking a proposal to generate nearly $5 billion in additional revenue from customers over the next four years.

They said it was a “very difficult time to discuss this request,” Southern California Gas Co. said. and San Diego Gas & Electric director Dan Skopec told a public hearing before the California Public Utilities Commission that the additional money was needed for infrastructure improvements.

The two utilities serve about 25 million customers in Southern California, from Visalia and San Luis Obispo in the north to the Mexican border in the south.

“There is never a good time to request rate increases,” Skopec said, but the rate increases would help prevent future supply problems. He also claimed that this winter’s price spike was due to high wholesale costs that were “out of our control”.

SoCalGas’ filing, filed with the CPUC in May, calls for $767 million in additional revenue by 2024, an increase of more than 20% over projected revenue this year.

After next year, revenue for the utility would increase by “$292 million (6.6%) in 2025, $267 million (5.6%) in 2026 and $413 million (8.3%) in 2027,” according to the proposal. The sum of all increases would be $4.9 billion over four years.

Constance Slider Pierre, an organizing director at the Utility Reform Network, a nonprofit consumer advocacy organization, spoke out against the proposed rate increases.

The proposal, she said, was “unacceptable” and would make it difficult for gas customers to recover from recent price hikes. According to her estimate, customers would pay an additional $264 per year in natural gas by 2027 if revenue increases were approved.

Higher prices would “disproportionately affect low-income families,” Pierre argued, noting that Sempra Energy, the parent company of SoCalGas and SDG&E, will make more than $2 billion in profits by 2022.

SoCalGas, meanwhile, noted that it had offered about $10 million in assistance to low-income families, senior citizens and small restaurant owners through programs such as the Gas Assistance Fund. But Pierre pointed out that the aid represented “less than half a percent” of Sempra’s profits last year.

After a series of hearings and negotiations over the coming months, the CPUC, which regulates utilities, will make a decision on how much SoCalGas — and SDG&E, which have been filed concurrently — can raise revenues.

Consumer advocates and frustrated customers submitted nearly 500 public comments for the hearing.

Several callers appeared to be reading scripts on behalf of corporate groups that supported the rate hikes, but most of the callers were taxpayers who were still angry with SoCalGas after the huge bills this winter and stunned that the company wanted even more.

A senior citizen from Menifee said her Social Security payments wouldn’t cover her huge bills. “I can’t afford to have the heating on in the house” when it’s cold, she said.

A resident of a low-income senior center in Moreno Valley said gas and electricity already eat up money, totaling half his rent.

“There’s no way we can afford any more increases,” he said. “We’ve been tapped.”

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