Consumer Group Charges SDG&E; Abuse

San Diego Gas & Electric Co. could reduce residential electricity rates by $58 million annually if it revamped purchasing procedures, placed stricter limits on executive expense accounts and trimmed other operating and maintenance costs, according to a study released Monday by the Utility Consumers Action Network.

SDG&E;’s typical monthly residential electric bill would drop about $4 to $37.86 if the state Public Utilities Commission accepted the San Diego-based consumer group’s recommendations, according to UCAN Executive Director Michael Shames.

The report describes “a number of management and operational deficiencies and inconsistencies within SDG&E;” and criticizes the utility for “questionable bidding and procurement practices” and an “unexplained increase” in its number of middle managers.

An SDG&E; spokesman on Monday called UCAN’s 327-page report “long on allegations and short on substantiations.” The report contains “pricing that we couldn’t figure out,” he said.

Shames said SDG&E; could trim its costs by millions of dollars each year by correcting “negligent purchasing procedures,” including a consistent practice of unnecessarily limiting contract bidding to one or two bidders.

UCAN’s report suggests that SDG&E; “took lessons from some unscrupulous defense contractors in its calculations for meter installation charges.” The group alleged that SDG&E;’s $120 installation charge could be cut back to $58 to $72 if the utility had better cost controls.

The report also alleges that spending by executives with company credit cards is “virtually unmonitored.” One SDG&E; executive has logged $6,870 to $42,104 a year on a company-issued credit card, according to the report.

“UCAN would like to know what these executives have been spending,” Shames said. “SDG&E; says it can’t tell us what the charges were for.”

The report also scores the PUC’s Division of Ratepayer Advocates, which represents the public in PUC reviews of SDG&E;, for using “sloppy calculations” in a continuing review of SDG&E; rates.