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SoCalGas requests $480M revenue hike for 2019 to support safety, reliability

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Essential Energy Insights - September 17, 2020

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SoCalGas requests $480M revenue hike for 2019 to support safety, reliability

Aiming to upgrade infrastructure and support safety, Southern California Gas Co. requested a nearly 20% increase in revenue in its 2019 general rate case.

The utility asked the California Public Utilities Commission to authorize a $480 million increase in its revenue requirement for 2019 relative to planned 2018 revenues, amounting to a 19.1% rise. For customers, this would translate to a $5 to $7.50 average increase in monthly bills starting in 2019, the company said in a news release.

SoCalGas said the increase is necessary for maintaining and improving safety and reliability in the gas delivery system and it would also use the money to enhance its risk-mitigation strategy.

Certain company costs are tallied in so-called regulatory accounts, and SoCalGas asked to adjust or create a number of these. Specifically, the utility asked to modify accounts related to its integrity management programs and storage integrity management and to create accounts for its pipeline safety enhancement plan, right of way management and liability insurance, among other things.

SoCalGas emphasized that the rate request does not include any costs associated with the Aliso Canyon underground gas storage facility leak. The utility discovered a breach at one of the field's wells in 2015 and struggled to stop the leak over the following months, ultimately sealing it off in February 2016. The company has since had to do extensive testing and upgrade work at the field. The CPUC in 2015 told SoCalGas not to ask for recovery of leak-related costs in the next rate case.

The Sempra Energy subsidiary's last rate case concluded in July 2016. The commission authorized a nearly $107 million rate increase, compared with the company's November 2014 request of $256 million. At that time, the requested revenue requirement increase would have been a 12% uptick from the estimated 2015 revenue.