SDG&E Profits Soar Despite Falling Energy Use: Unpacking the Mystery

Why Are San Diego's Electricity Bills Rising While Usage Falls?

In San Diego, many residents are puzzled and frustrated as they observe an alarming trend: despite using less electricity, their bills continue to rise. Intuitively, one would think that lower energy consumption would lead to lower costs, especially when sustainability is a priority. However, this is not the case with San Diego Gas & Electric (SDG&E).

The Economics Behind SDG&E's Profit Margins

Over the past decade, SDG&E's profits have surged by an astonishing 56%, according to their SEC filings. This spike occurs even as they deliver 16% less electricity to their customers. This anomaly raises questions about the structure of the utility's business model. California’s Public Utilities Commission essentially guarantees profits based on the company’s spending rather than its performance in energy sales. With SDG&E’s expenses encompassing everything from infrastructure to payroll and state programs, the incentives do not align with consumer interests.

Examining the Utility's Business Model

SDG&E operates as an investor-owned utility, a scenario that presents unique challenges to oversight and accountability. The more the utility spends, the higher its profits. This is contrary to basic economic principles where one would expect profits to decline alongside reduced sales. As a result, the public has very little influence in the regulatory process, which often favors SDG&E at the expense of the consumer.

The Illusion of Energy Conservation

SDG&E contends that falling energy use and the rise of rooftop solar installations are unfairly shifting costs to those who continue to use grid power. However, this argument skirts the underlying issue: true cost savings for consumers do not materialize when the utility’s model rewards spending rather than efficiency.

The Consequences of Steep Rate Increases

SDG&E has also adopted various tactics to mask the true nature of its price increases. Changes like proposed “revenue-neutral” tariffs and flat monthly fees shift costs disproportionately onto those who conserve energy, making conservation seem punitive. As a community, we must recognize that these practices ensure that profits come from the customers’ pockets, perpetuating a vicious cycle where taking steps toward sustainability results in higher costs.

Future Advocacies for San Diego Utility Consumer Rights

There is a growing movement advocating for a non-profit utility in San Diego, which would prioritize ratepayers over shareholder profits. Public Power San Diego emphasizes local, renewable energy generation to reduce costs and lower dependence on long-distance transmission lines. Such a transformation could lead to significant savings for local consumers while actively addressing climate concerns with cleaner energy solutions.

Conclusion: The Path Forward for San Diego Consumers

As San Diegans grapple with rising electricity costs, it is crucial to understand the systemic issues underpinning SDG&E’s operations. Greater awareness and advocacy for consumer-friendly practices can potentially shift the utility towards a model that prioritizes the public's interests.

To join the movement for transparent and affordable utilities in San Diego, consider participating in local discussions and initiatives that promote public power solutions. Together, we can pave the way for a more equitable energy future.