SDG&E’s profits are soaring for various reasons and rate payers are noticing the effect in higher monthly bills. NBC 7’s Kelvin Henry has a closer look at what’s causing this situation.
SDG&E's profits have soared in recent years and ratepayers are taking notice after seeing higher monthly bills.
The utility company that serves more than 3 million people in San Diego County says a large reason why their profits are up is because of record investments that improve their products for ratepayers.
The utility company reportedly made over $900 million in profits in 2022.
In a statement to NBC 7, SDG&E said their profits allow them to provide for their customers.
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“Energy affordability is a top priority for SDG&E, as we work to build a safer, stronger energy system that can withstand climate threats and help California become carbon neutral by 2045," SDG&E Media Relations Manager Anthony Wagner said. "SDG&E’s financial health enables us to make the grid investments needed to provide our customers with nationally recognized reliability, wildfire safety and clean energy innovations. It’s important to remember that SDG&E’s earnings are regulated by the California Public Utility Commission and determined through a rigorous public review process,”
Critics like Mark Toney, Executive Director of The Utility Reform Network, say their earning model is unsustainable.
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“SDG&E is recording record profits. Nearly a billion dollars in the past year and this is something that’s of a lot of concern,” Executive Director of The Utility Reform Network Mark Toney told NBC 7's Kelvin Henry.
Utility companies like SDG&E often cite climate change, the rise of electric vehicles and the battery storage necessary to sustain them as factors driving costs up.
Toney says costs are about priorities.
"Every utility company, including SDG&E, has choices to make as to where to make their investment and how to make things as safe as possible at the most cost-effective manner," Toney said.
"There needs to be a cap on annual rate increases and the cap should be no more than the cost of living adjustment that social security recipients receive," Toney said.
SDG&E’s rate of return on investments hover around 7%.
A recent state audit said that the utility company has exceeded the allowed rate of return in nine of the last 10 years. There is nothing intrinsically wrong with exceeding the rate of return and the state auditor said SDG&E did not do anything improper.
Many utility companies cite rising overhead due to increased investment in infrastructure projects and modernization of their systems.
SDG&E agreed to a sit-down interview with NBC 7 later in the week to go through all of the details but did not respond directly to those questions before this story was published.
Many ratepayers say affordability and clean energy are what matters to them, but SDG&E's high costs might soon become too much.
"I get kind of scared to open up the [SDG&E] app because I don’t know what number I’m going to get," said San Diegan Diana Gomez.
“I will probably have to move somewhere else because yeah, everything is just too expensive, that’s why people are like moving back in with their parents, because it’s all just too much,” Gomez said.
