SDG&E;’s 12-Year Increase of 435% Tops U.S. Cities

San Diego Gas & Electric customers were saddled with a bigger rate increase--434.93%--than residents served by any other major American utility over the 12-year period ending in 1983, according to a study to be released today by a regulatory oversight group.

The 246-page study, prepared by the Washington, D.C.-based National Association of Regulatory Utility Commissioners, shows that SDG&E;’s residential rate increase between 1972 and 1983 was more than twice the national average of 196% and was 76% greater than the company with the next highest increase, Houston Lighting & Power Co.

The association is a quasi-governmental group made up of representatives from utility regulatory bodies in every state and the District of Columbia. It based its conclusions on annual data the utilities are required to file with the federal government, Michael Foley, the association’s director of financial analysis, said Sunday.

Foley said the group’s report, called “Electric Utility Performance Study” and produced over the past six months, focuses on the 112 largest electric utilities in the country. He said the report shows that SDG&E; also was ranked 98th in terms of “productivity deterioration” and that the company was “about average” in terms of its financial performance over the 12 years.

“They didn’t do that great,” Foley said. “In all three categories, only 16 companies were below average consistently. SDG&E; was among the 16.”

An SDG&E; spokesman, informed of the study’s results Sunday, admitted his company’s rating as having the highest percentage rate increase was “probably valid” and “accurate” but said that the report “draws on old data and paints a very negative picture that is not reflective of what’s happening now.”

Spokesman Maurice Luque said the study focuses on “a period that was one of the worst ever for SDG&E;, a time when oil and natural gas prices were at an extremely high level and when SDG&E; was dependent almost entirely on those two energy sources.”

Today, Luque said, SDG&E; rates have “stabilized, even decreased. The fact is, the average customer paid a lower bill on Jan. 1 of this year than on Jan. 1, 1984.”

Luque said an average San Diego household, defined as one using 400 kilowatt hours of electricity and 40 therms of natural gas, paid $68 on Jan. 1, 1985, and was charged $72 for the same service last year.

The decline, he said, is a result of the increasingly diverse mix of energy sources SDG&E; is tapping.

“Back in the ‘70s, when other companies were relying heavily on coal, hydro, geothermal and nuclear power, SDG&E; received 60% of its power from highly expensive natural gas and oil sources,” Luque said. “Now, only about 15% of our power is gas or oil supplied because we’ve developed a wider range of energy sources.”

Foley agreed with Luque’s assessment: “Essentially, it looks like SDG&E; suffered by putting all their eggs in one basket.”

In addition to tapping a greater variety of energy sources, the San Diego utility 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.

“Only 14 utilities did worse than SDG&E; in terms of productivity change, or productivity deterioration,” Foley said. “In 1972, the utility produced 48 kilowatt hours for every dollar of input and by 1983 the figure was 23 kilowatt hours for every dollar of input--or only about half as many.”

Foley said that measure is calculated in inflation-adjusted dollars and therefore does not fluctuate according to the changing price of an energy source.

The study is intended for use by state utility regulators in need of an “objective” means of evaluating the performance of a given company, Foley said.

“During a rate case, regulators are bombarded with so-called objective studies by consultants working for the utility firms,” Foley said. “It is important for regulators to get the facts from a third party, like us, rather than someone with an ax to grind.”

The report shows that the Montana Power Co. of Billings, Mont., registered the smallest increase for its residential users over the 12-year period--78.98%, the only utility on the list with an increase below 100%, Foley said.

Other calculations reveal that Consolidated Edison Co. of New York had the highest rates for all customer classes--residential, commercial and industrial--in both 1972 and 1983, but that 16 other firms had higher increases for residential customers during the same period.

Another section of the report singled out Wisconsin Electric Power Co. of Milwaukee as having the strongest financial record of any electric utility. Detroit Edison Co. had the weakest financial record.