Under the radar of the usual public discussion on business agenda items, Sempra Energy quietly celebrated Friday as the California Public Utilities Commission (CPUC) separately and unanimously approved a $6.5 million reward for its gas utility supply purchasing programs and an amendment to a delayed pumped storage generation project that could bring its electric utility operations some extra revenues.

Action by the CPUC came by way of its “consent agenda” in which it voted unanimously for dozens of items en masse with no discussion. This is how each of these Sempra items involving millions of dollars were handled.

In a 15-year-old gas cost-incentive program, Sempra’s Southern California Gas Co. (SoCalGas) utility gained the regulators’ approval for a reward to shareholders of $6.5 million for its most recent one-year wholesale gas purchasing efforts, in which Sempra has become reasonably good at maximizing its performance in buying gas for its captive utility customers that number more than 6 million.

After an audit by the CPUC independent consumer unit, it was concluded that SoCalGas’ supply purchasing program for the one-year period involved saved about $50.1 million, of which the utility ratepayers were assigned $43.6 million in benefits and the utility shareholders get the rest ($6.5 million).

“The decision finds that SoCalGas reasonably managed its gas acquisitions and operations within the context of its gas cost incentive mechanism that existed at the time, and that the calculation and amount of the shareholder award is correct,” the CPUC said.

For Sempra’s San Diego Gas and Electric Co. (SDG&E), the CPUC approved an amendment to a 2004 power supply deal for 40 MW from a pumped storage project proposed by the San Diego County Water Authority that was supposed to be operational by the start of 2008. It has not come on-line for various reasons, and the utility and the county agency have subsequently worked out a deal to reimburse SDG&E for the delays.

The Lake Hodges-Olivenhain Pumped Hydroelectric Storage Facility is not operational, and the CPUC-approved amendment that the utility and county facility hammered out allows SDG&E to exchange delay damages in its original contract with expanded rights that will give it half of the profits from the pump storage project’s eventual ancillary services contract with the state grid operator.

In total, SDG&E customers get $3.2 million in annual accrued monthly damage payments from the county, along with the 50-50 split of the service fees that the pumped storage facility is in line to get from the California Independent System Operator.

“We find that the proposed amendment will allow SDG&E to receive the benefits of the electric resource contract [40 MW] with the water authority, and receive delay [penalty payments] and expanded rights under the agreement,” the CPUC said.

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