Sempra chairman wants customer refunds


Sempra Energy Chairman Stephen L. Baum called upon the Federal Energy Regulatory Commission to require refunds of "excessive charges" for electricity charged to consumers during this summer's price spikes, especially in the San Diego area, during testimony Tuesday.

Sempra Energy is the parent company of San Diego Gas & Electric (SDG&E), the first electric utility in the country whose customers have been exposed to prices in the volatile wholesale electricity market.

Baum said "no one�including SDG&E�foresaw this summer's huge run up in prices."

Under state law, SDG&E is required to purchase power from the California Power Exchange (Cal-PX) on behalf of customers who have not chosen an alternate energy service provider and pass the price of that power onto customers with no mark-up.

SDG&E customers now pay two primary charges on their bill: one for the regulated delivery service SDG&E provides and the other for the wholesale market price of electricity from the Cal-PX. The regulated delivery charge for SDG&E's services is lower today for residential customers than it was before deregulation, but the wholesale electricity price�the pass-through charge to customers from the Cal-PX�has more than quadrupled in the past 2 months.

To lower prices, Baum called for fundamental changes in the wholesale market structure serving California customers. Until this is accomplished, Baum recommended instituting targeted caps on the bids power generators can make when selling to the state's utilities through the California Independent System Operator (ISO) and the Cal-PX.

He also criticized a new state law capping consumer rates as a short-term fix that does nothing to address serious structural flaws in the California market. By requiring SDG&E to pay market price for electricity but sell it at a fixed price below market, "the new law simply creates a loan for our customers with a huge balance that will come due 2-3 years from now," Baum said.

Related Articles

Marathon cuts 2015 budget amid ‘current price environment’

12/18/2014 Marathon Oil Corp. expects to spend $4.3-4.5 billion in its capital, investment, and exploration budget for 2015. That total represents a 20% decli...

Russia’s Turkey pipeline deal possibly may keep door to Europe ajar

12/18/2014 Russia’s memorandum of understanding to build a natural gas pipeline to Turkey after canceling its South Stream project could help keep the door op...

MEG Energy cuts capital spending for 2015 to $305 million (Can.) from $1.2 billion

12/18/2014

MEG Energy Corp., Calgary, is reducing its 2015 capital spending plans to $305 million (Can.) from the original budget of $1.2 billion.

Severance tax would backfire, Pennsylvania association leaders warn

12/17/2014 Enacting a severance tax aimed at Pennsylvania’s unconventional natural gas activity would substantially harm the commonwealth beyond the industry ...

MARKET WATCH: Oil prices held steady on NYMEX awaiting crude inventory

12/17/2014 Oil prices held fairly steady on the New York market in Dec. 16 trading while Brent crude oil prices fell by more than $1/bbl on the London market....

Encana to focus spending on four core shale assets in 2015

12/16/2014 Encana Corp., Calgary, reported plans to spend $2.7-2.9 billion on its capital budget with roughly 80% of this total directed towards four of what ...

Cenovus trims budget, slows oil sands work

12/16/2014 Cenovus Energy Inc., Calgary, is trimming its capital spending in response to declining crude oil prices and will slow development of some of its t...

MARKET WATCH: Oil prices continue falling awaiting economic statistics

12/16/2014 Oil prices on the New York market dropped in Dec. 15 trading following reports of supply disruptions in Libya and awaiting reports of economic stat...

MARKET WATCH: OPEC basket price closes below $59/bbl

12/15/2014 The average crude oil basket price for the 12 members of the Organization of Petroleum Exporting Counties closed below $59/bbl on Dec. 12 while cru...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected