Printer Friendly

UTILITY REGULATORY REVOLUTION: SHAREHOLDERS', RATEPAYERS' INTERESTS NOW THE SAME

 SAN DIEGO, Oct. 18 /PRNewswire/ -- Today, with one regulatory leap, energy utility customers and shareholders will for the first time be on the same side of the fence.
 A groundbreaking ratemaking proposal submitted by San Diego Gas & Electric Co., which serves 1.1 million customers in Southern California, was negotiated and endorsed by the state's major utility consumer advocate group, the California Public Utilities Commission's (CPUC) Division of Ratepayer Advocates, SDG&E officials announced today.
 The proposal, called the Base Rates Mechanism, is part of a four- part Performance-Based Rates proposal. Its objective is to transition the traditional cost-of-service means of setting gas and electric rates to more competitive market-driven rates. Considered the most distinctive part of the overall proposal, the Base Rates Mechanism will now be evaluated by an administrative law judge and interested parties before it goes before the CPUC later this year.
 "This is the first time an energy utility has sought this level of accountability for its performance," said SDG&E Chief Executive Officer Thomas A. Page. "Putting company earnings on the line is a statement of our confidence that SDG&E is, and will continue to be, an efficient, nimble and resourceful utility."
 Once implemented, each of the proposal's four mechanisms will evaluate SDG&E against set benchmarks in every aspect of its business, including customer service, competitive rates, employee safety, system reliability, prudent energy procurement, and containment of operating and maintenance costs.
 If benchmarks are met or exceeded, the rewards are shared between SDG&E customers -- in the form of lower rates -- and SDG&E shareholders -- as increased return. If performance slips below the benchmarks, shareholders and customers share the burden.
 SDG&E, whose rates were the third highest in the nation as recently as 1987, used strategic cost-cutting measures and improved employee productivity to bring rates down to 39th highest this year, and the lowest in California for the fifth year in a row.
 "Our employee productivity leads the industry, and that is the cornerstone to our cost-competitiveness," said Page.
 The agreement with the CPUC's Division of Ratepayer Advocates, along with a separate endorsement from the Federal Executive Agency (representing the United States Navy, SDG&E biggest customer) winds to a conclusion a year-long regulatory process. The first two segments of the proposal, addressing gas procurement and electric generation and dispatch, were approved in July and implemented Aug. 1. The third mechanism addresses competitive electric procurement -- of critical importance to SDG&E, which last year purchased 51 percent of its electricity because it could do so cheaper than producing the electricity itself. Hearings on this final mechanism have not yet been scheduled.
 -0- 10/18/93
 /NOTE TO EDITOR'S: San Diego Gas & Electric Executive Vice President Stephen L. Baum and Donald E. Felsinger will be available for interviews today between 1 p.m. and 2 p.m. PDT./
 /CONTACT: Gretchen Griswold of San Diego Gas & Electric, 619-696-4309/


CO: San Diego Gas & Electric ST: California IN: UTI SU:

EH-JB -- SD006 -- 3470 10/18/93 14:39 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Oct 18, 1993
Words:503
Previous Article:OPTIONS PRICING FOUNDER MYRON SCHOLES & SEC COMMISSIONER J. CARTER BEESE JR. TO KEYNOTE AMEX AND OSLO STOCK EXCHANGE'S INTERNATIONAL COLLOQUIUM
Next Article:MAIN ST. & MAIN INC. ANNOUNCES NEGOTIATIONS TO ACQUIRE 20 T.G.I. FRIDAY'S RESTAURANTS IN CALIFORNIA
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters