SDG&E; Head Sees Fall in Home Energy Bills
SAN DIEGO — Residential energy bills will drop in the next 11 months, the result of a continued decline in the prices of fuel oil and natural gas, San Diego Gas & Electric Co.’s chief executive predicted Wednesday.
The falling energy prices will mean rate adjustments in 1985 and downward revisions on SDG&E;’s current $122-million rate-increase proposal for 1986, according to Thomas A. Page, SDG&E;’s chairman, president and chief executive.
The current typical monthly residential energy bill is $67.40, compared to an average $70.79 at the end of 1983.
Meanwhile, SDG&E; has embarked on a five-year financial plan that officials believe will increase dividends, improve the trading price of its common stock and keep its bond-agency rating at an “A†level.
The utility’s last five-year plan, which ended in 1983, reversed SDG&E;’s poor financial positions and raised the company’s bond rating from triple-B to A.
The new plan will allow SDG&E;’s rate of return on equity to remain in the top 25% of the nation’s utilities, according to Page.
For the year ended last Dec. 31, the utility’s rate of return was 13.4%. It would have been 16%--its state-authorized rate--had state regulators not levied a $45.1-million fine against SDG&E; for “unreasonably†extending a fuel oil contract in 1979.
According to Steven Edwards, SDG&E; manager of special projects, the new plan calls for: continued dividend increases and a rate of return that boosts the trading price of SDG&E;’s common stock; earnings to cover 3.75 times its annual interest payments; 65% of all cash needs to be generated internally; common stock equity to total between 45% and 47% of capitalization (including short-term debt and leases), and construction expenses to total no more than 10% of capitalization.
The stock closed unchanged Wednesday at $23.125.
The company’s ambitious plans drew the criticism of Gary DeLoss, executive director of the Utility Consumers Action Network, which monitors SDG&E;’s rate proposals and financial position.
“Can San Diego afford (SDG&E;’s) ambitions?†asked DeLoss. “The company wants (peo ple) to look at its economic interests, but the Public Utilities Commission should look beyond the corporate balance sheet to the impact on the local economy, on local business and household budgets.â€
UCAN’s lobbying on behalf of SDG&E; ratepayers saved consumers $6.5 million during last month’s rate-hike hearings before the PUC, DeLoss contended.
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