Rate Increases Approved for SDG&E;, SCE : Utilities: Foes of proposed merger say SCE’s higher rate of increase is one reason why a merger with SDG&E;’ shouldn’t be approved.

The state Public Utilities Commission Wednesday approved electric-rate increases for San Diego Gas & Electric and Southern California Edison, an action that further increased the disparity between the utilities’ residential rates.

The PUC granted SDG&E; a $56 million, or 4% rate increase that will take effect Jan. 1. That will raise the average monthly SDG&E; gas and electric bill for residential customers by $2.25 to $63.33. Edison customers who now pay the typical residential bill of $55.37 monthly will be charged $4.97 more a month.

Based upon Wednesday’s action, Edison’s system-wide cost of electricity, when measured per kilowatt hour, rose to 10.3 cents. SDG&E;’s system-wide cost per kilowatt hour rose to 9.7 cents. Opponents of SDG&E;’s planned merger with Edison have complained that the merger does not make sense because Edison’s rates are increasing faster than SDG&E;’s.

Electric rates for Edison’s residential customers will rise by 9.3%, while SDG&E;’s residential rates will increase by about 4% because of Wednesday’s PUC decisions. Residential rates at Pacific Gas & Electric, the state’s only other large, investor-owned utility, will increase by 11.8% because of rate increases authorized on Wednesday.

During a series of filings earlier this year, SDG&E; had requested a total of $124 million in rate increases. The commission approved only about $56 million of the amount requested. Commissioners previously rejected $18 million of the $124 million requested and have not yet ruled on another $49 million in rate hikes.

The rate increases granted Wednesday “show that Edison customers are still paying for the (power sources) that Edison aggressively pursued during the late 1980s,” said Michael Shames, executive director of Utility Consumers Action Network. a San Diego-based consumer group. “They also show that SDG&E;’s flexibility (in power sources) continues to be an asset. . . . There are no surprises. . . . it’s what was predicted.”

“What a Christmas present,” said an unhappy Joel Singer, a staff attorney with Toward Utility Rate Normalization, a consumer advocacy group in San Francisco. “The customers who use the least will pay the greatest increase,” said Singer, “and all residential customers will pay substantially more than the total increase.”

The PUC and the utilities said that raising residential rates more than those for industry reflected a need to balance inequities from past years, when large industrial users complained that they were in effect subsidizing residential power use.

Edison spokesman Lew Phelps said Wednesday that, in the late 1980s, several big customers threatened to pull out of the utility’s system and generate their own electrical power.

“If we had lost these large industrial customers, all the fixed costs of the system would have been dumped on residential customers,” Phelps said.

PUC officials described the latest round of rate increases as “significant but not record-setting.” It attributed the hikes to the costs of power bought from small producers, to rises in natural gas and oil prices, and to an expected reduction in natural gas availability in the winter, forcing Edison to buy more higher-priced oil.

Consumer groups have challenged the prices Edison pays for power to companies it controls.

The utility was recently penalized by the PUC for paying too much for power it bought from its own company, Mission Energy Co., in Kern County. The utility was charged $48.3 million as a result. Another challenge is pending that could force the utility to reimburse $51 million to its customers because of allegedly excessive payments to two co-generation power plants.

Edison executives laid most of the blame for the latest rate hikes on increases in fuel costs, primarily from its third-party suppliers. The company, which burns more natural gas than oil, expects to pay 25% more next year for gas for its own facilities. Its suppliers will pay 22% more.