UPDATED AS OF 5.29.18 Reduction in Revenue Requirement Associated with the Tax Cuts and Jobs Act of 2017 -- Rate Request Would Modernize and Upgrade Gas Infrastructure to Enhance Long-term Reliability and Safety
LOS ANGELES—Oct. 6, 2017— Southern California Gas Co. (SoCalGas) today filed its 2019 rate request with the California Public Utilities Commission (CPUC). The request is a detailed projection of what it will cost to dependably and safely deliver affordable natural gas to the company’s 21 million consumers from 2019 to 2022. The rate request would allow SoCalGas to modernize and upgrade its gas infrastructure to enhance long-term reliability and safety; attract and retain highly-trained, responsive employees who serve its customers; and support the growth of diverse energy options now and well into the future.
“Our 2019 rate proposal is focused on prudent investments that will enhance the safety and reliability of our system by modernizing and upgrading our infrastructure, support a top-notch workforce, and help maximize renewable energy options for our customers,” said Lisa Alexander, SoCalGas vice president for customer solutions. “We are committed to collaborating with customers and stakeholders during the rigorous review of this request, and working to keep bills as affordable as possible for every Southern California family and business we serve.”
If approved in its entirety by the CPUC, the critical investments proposed in this rate request would increase average residential customer bills about $4.50 to $7.00 per month starting in 2019. This increase is slightly less than originally projected due to a reduction in revenue requirement associated with the Tax Cuts and Jobs Act of 2017.
According to the latest data available from the American Gas Association, in 2015, SoCalGas had the second-lowest average annual bill among the 50 largest gas utilities in the country, and natural gas continues to rank among the most affordable sources of energy. As a regulated utility, SoCalGas does not make a profit on gas delivered to its customers: the company works to cost-effectively buy, transport, store, and distribute natural gas, with savings benefiting customers directly.
More than 90 percent of Southern Californians use clean natural gas to heat their homes and water. In addition, because about 60 percent of electricity generated in California comes from natural gas-fired power plants, this clean fuel is also used to keep the lights on around the clock.
Under the request, natural gas remains the most efficient and affordable way to heat homes and water, as well as provide fuel for cooktops and other appliances. SoCalGas will continue to provide energy-efficient tools to empower customers to reduce their consumption and monthly bill, and look to control costs in its own business to keep service affordable.
The proposed rates include additional costs that will help SoCalGas continue to meet its commitment to delivering safe, clean, and reliable natural gas service to customers including:
Approximately 60 percent would support modernization and upgrading critical infrastructure to enhance the reliability and safety of natural gas service.
Roughly 30 percent would cover costs to attract and retain SoCalGas’ highly skilled workforce and includes cost reductions SoCalGas has achieved through measures such as improving the efficiency of employee training.
The request also includes increased support for renewable energy and improvements to customer services and technology solutions.
SoCalGas’ rate request would support the modernization and upgrading of critical infrastructure to enhance the reliability and safety of natural gas service, including upgrades to pipelines and compressor stations; modernization of pipeline and safety monitoring technology; increase testing and monitoring of more than 100,000 miles of pipeline and millions of meters; and upgrades to the company’s gas leak detection and mitigation tools to enhance safety, increase efficiency, and improve environmental protections.
The rate request will also help maximize renewable energy and provide customers more energy options to power their homes and businesses. Reliable natural gas allows more solar and wind resources to come online, providing a crucial safety net to the electric grid when the wind isn’t blowing or the sun isn’t shining. SoCalGas’ rate request will also support local California biogas projects that will help California meet its renewable energy goals and remove pollutants from the atmosphere.
SoCalGas’ 2019 rate request does not include any costs associated with 2015 leak at the Aliso Canyon natural gas storage facility. In 2015, the CPUC ordered SoCalGas to exclude all costs related to the Aliso Canyon leak from this rate request.
What SoCalGas is doing to control costs and keep rates as low as possible
Californians deserve a reasonable, transparent, and affordable price for the natural gas they use. That’s why SoCalGas is always proactively working to find ways to make energy bills as affordable as possible for its customers. The company is cutting costs and improving efficiency to generate more than $120 million in savings for customers. In addition, SoCalGas offers energy efficiency and assistance programs to help customers save energy and money. Since 1990, the company’s energy efficiency and rebate programs have helped families and businesses save approximately $672 million on their natural gas bills.
SoCalGas and other large investor-owned utilities in California file general rate case applications every three to four years. The CPUC oversees the proceedings, which include numerous regulatory and public hearings with testimony from ratepayer advocates, environmental groups, and others. The rate request process is scheduled to take at least 12-18 months.
More information about SoCalGas’ rate request, may be found at socalgas.com/rates.
Headquartered in Los Angeles, SoCalGas® is the largest natural gas distribution utility in the United States, providing clean, safe, affordable and reliable natural gas service to 21.7 million customers in Central and Southern California. Its service territory spans 22,000 square miles from Fresno to the Mexican border, reaching more than 550 communities through 5.9 million meters and 101,000 miles of pipeline. More than 90 percent of Southern California single-family home residents use natural gas for home heat and hot water. In addition, natural gas plays a key role in providing electricity to Californians—about 60 percent of electric power generated in the state comes from gas-fired power plants.
SoCalGas has served communities in California for 150 years and is committed to being a leader in the region’s clean energy future. The company has committed to spending $6 billion over the next five years to modernize and upgrade its gas infrastructure, while also reducing methane emissions. SoCalGas is working to accelerate the use of renewable natural gas, a carbon-neutral or carbon-negative fuel created by capturing and conditioning greenhouse gas emissions from farms, landfills and wastewater treatment plants. The company is a subsidiary of Sempra Energy (NYSE: SRE), a Fortune 500 energy services holding company based in San Diego. For more information visit socalgas.com/newsroom or connect with SoCalGas on Twitter (@SoCalGas), Instagram (@SoCalGas) and Facebook.
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