The independent consumer unit at the California Public Utilities Commission, the Division of Ratepayer Advocates (DRA), July 5 released a recommendation to slash by $180 million the retail rates of Sempra Energy’s two California utilities, Southern California Gas Co. (SoCalGas) and San Diego Gas and Electric Co. (SDG&E). An administrative law judge will later make a separate recommendation in the case.

Evidentiary hearings on the utilities’ rate requests are set to begin in August, and other proposals from outside consumer groups — San Diego-based Utility Consumer Action Network (UCAN) and San Francisco-based The Utility Reform Network (TURN) — were expected late last Friday (July 6). The utilities are asking for the rate changes to be effective Jan. 1.

Utility officials in public reaction statements dismissed the DRA proposal as “inappropriate” and called some of its conclusions about the utility compensation request wrong.

DRA recommended a $67.7 rate decrease for SoCalGas, and a $4.3 million decrease in SDG&E’s natural gas rates. On the electric side, DRA proposed to cut SDG&E’s requested increase by $108 million.

Overall, the DRA recommended a 4.3% reduction in base revenues for SoCalGas, compared with the $139.3 million, or 8.8%, increase the utility requested. SDG&E’s gas base revenues would be decreased 1.9%, compared to the utility’s request for a $33.8 million, or 15.1%, increase. And for retail electric rates, DRA proposed a $90 million, or 9.5%, increase, compared to SDG&E’s request for $197.9 million, or 20.8%.

SoCalGas has requested an increase in its rates of $140 million annually, or 11%, and the DRA recommended a large reduction. In total, DRA’s approach represents a $200 million difference with the utility, whose proposal would increase monthly retail gas bills by $2.36 to $62.90. The DRA proposed reduction would result in lowering the average monthly bill by $1.15 to $59.40.

As part of the proposal, DRA targeted some $60 million in proposed incentive bonuses and compensation programs collectively at the two affiliated utilities.

“The rate increase proposed by SoCalGas and SDG&E should be reduced significantly,” said DRA Director Dana Appling. “It is patently unfair for consumers to be asked to pay for excessive executive and management bonus, compensation and stock option programs.”

DRA targeted cuts in seven major areas: employee benefits, gas operations/maintenance expenses, electric distribution operations/maintenance expenses, corporate center costs allocated to the utilities, rate base forecasts, depreciation expense forecasts, and customer service operations/information expenses.

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