News Archives

January 1 , 2007

SAN DIEGO BUSINESS JOURNAL
Natural Gas Rates Expected to Remain Steady for a While
by Michelle Mowad

Gas prices are projected to increase, energy utility rates are anticipated to remain relatively flat for the first half of the year and more people are expected to go green in 2007.

Energy utility bills for homes and businesses are expected to remain flat for now, even though San Diego Gas & Electric Co. planned to file an electric rate adjustment with state regulators to take effect Jan. 1.

“We expect residential rates to be flat,” said SDG&E spokesman Eddie Van Herik.
If proposed rate adjustments are approved, SDG&E’s 3.4 million consumers in San Diego and southern Orange counties would experience seamless billing with prorated charges to their monthly accounts.

On the plus side, customers can expect lower natural gas heating bills the rest of this winter as compared with last year.

Meanwhile, both SDG&E and Southern California Gas Co. filed for yet another rate increase starting in 2008.

The proposed rate increase would bump the bill of a typical residential electric customer using 500 kilowatthours a month. The change would increase rates by 2 percent or $1.70 monthly. Gas customers using 40 therms a month would see their bill rise 7 percent or $3.90 a month.

The filing is part of an annual 12-month review conducted by the California Public Utilities Commission in San Francisco.

Incentives to Go Green
The PUC approved an incentive program last year to help pay for installing solar energy systems at homes and businesses.

The California Solar Initiative will provide $2.8 billion for incentives toward projects, including retrofitting residential properties, as well as new commercial, industrial and agriculture solar projects, in a 10-year span.

Tom Geldner, marketing director for the San Diego Regional Energy Office, said San Diego should receive 10 percent of the billion-dollar budget earmarked for the work.
“The California Solar Initiative has potential for putting a lot of money back into San Diego’s economy,” said Geldner.

Geldner anticipates applications will be available at www.sdenergy.org and www.gosolarcalifornia.ca.gov within three months.

Kirk Mulligan, chief executive officer of Carmel Mountain Ranch-based Clean Power Systems, said economics drive a consumer’s decision to purchase a solar electric system.

“It is good for the environment, but the main reason people call us to install a solar electric system is because it will cost them virtually nothing to be green and they won’t have electric bills that keep rising,” said Mulligan.

Clean Power Systems saw a 200 percent increase in revenues in 2006 and expects to see the same in 2007.

Mulligan estimated that other Southern California solar energy contractors saw similar revenue growth, but questioned how the first half of 2007 would shake out with major module shortages and slight price increases for those modules.

The California Energy Commission said that in 2004, 10.2 percent of all electricity generated came from renewable sources. A state law requiring energy providers to generate 20 percent electricity from renewable sources by 2010 is on course in San Diego, according to SDG&E.

In November, the utility said it would acquire an additional 120 megawatts of solar and geothermal power by 2010, enough to power 78,000 homes.

Need For More Energy
SDG&E anticipates adding 20,000 new customers this year. The growth is similar to years past, which is forcing the utility to seek more energy sources.

The Sunrise Powerlink is a 150-mile electric transmission line proposed by SDG&E to be constructed between Imperial Valley and San Diego.

The link would be capable of handling the energy needs of more than 650,000 new customers, says SDG&E.

Spokeswoman Stephanie Donovan said the utility believes that the project is the “best solution” to assure the utility can continue to deliver reliable energy in 2010 and beyond.

“We have forecast an electricity shortfall that we would not be able to deliver, either from what we are able to produce in San Diego or what we are able to import from outside the region, enough electricity to meet our consumers’ anticipated needs by 2010,” said Donovan.

This year, more than two dozen hearings, meetings and testimony reports will be due before the PUC will make a final decision on the project in January 2008.

It’s Only Up From Here
An analyst with the Utility Consumers’ Action Network projects the price for gasoline will climb in 2007.

UCAN gas analyst Charles Langley projects trends in 2007 to be similar to last year, with prices to rise along with other necessities.

The U.S. average retail price for regular gasoline Dec. 11 was $2.29 per gallon, 10.8 cents higher than 2005.

West Coast prices increased 7.1 cents to $2.93 per gallon, in the same period, according to the federal Energy Information Administration.

Langley said consumers rang in the new year in 2006 with the lowest price of the year, at $2.30 per gallon.

However, he anticipates increases to be similar to last year.

“Unless we see a huge drop in the price of oil, we can expect prices in the $3.50 a gallon plus range just like last year,” according to Langley. “It is very likely that we may see diesel approach or even surpass the $4 a gallon mark.”

More than half the energy consumed in the United States goes toward transportation, and in California the demand for transportation fuels is projected to grow almost 35 percent in the next 20 years, according to the San Diego Regional Energy Office, an independent, nonprofit organization that helps businesses and the public save energy.