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CBS 8 sits down with SDG&E Sr. Executive to discuss rising costs, frustrated customers

No question was off limits when Shannon Handy with CBS 8 sat down with Scott Crider, SDG&E Sr. VP of Customer Services and External Affairs.

SAN DIEGO — Shannon Handy with CBS 8 sat down with Scott Crider, SDG&E Sr. VP of Customer Services and External Affairs to discuss everything from why our bills are high to how the company plans to regain people's trust. No question was off-limits.

THE FULL INTERVIEW | CBS 8 sits down with SDG&E to discuss rising costs, frustrated customers 

Transcript of the full interview

Shannon Handy, CBS 8  

Scott, thank you for sitting down with us, of course, I'm going to cut right to the chase CBS 8 viewers are upset, they're frustrated, they're angry. Why are we paying the highest rates in the country?

Scott Crider, SDGE  

Well, let me first start off by saying that, you know, we've heard loud and clear from our customers, that they're frustrated right now. We've talked to 1000s of them over the last couple of weeks. And we recognize this as a really difficult time. So you know, rates, you know, have gone up, they've experienced higher bills at a time when San Diego is also experiencing, you know, 40, year high and inflation. So that means the cost of food, the cost of gasoline, the price of housing, everything's going up right now. So we recognize that this is a real challenging time for them. And but we want them to know that we are taking action. What action are you taking? You know, there's a couple of things that we're looking at right now. You know, number one is that we are going to be pursuing legislation this year, to help remove some of the energy programs out of the energy bill. And over to the state. We think this is a common sense approach where we could provide some fast relief, you know, to our customers, while still maintaining those important energy programs. Number two is, you know, we're talking to legislators and regulators about the need for comprehensive electric rate reform, the way that we're pricing electricity today is not going to be really in line with where we need to go as a region, as we start to see more electric vehicles, less natural gas use in the home and more electricity usage, we really need to modernize our rates here in the state of California to make sure that we're maintaining affordability, while at the same time continuing to invest in the grid to make sure it's reliable and ultimately clean.

Shannon Handy, CBS 8  

These steps that you mentioned, was this already in the works? Or is this the result of so many people complaining?

Scott Crider, SDGE  

No, these things were already in the works. So you know, we've actually been raising the need to really, again, have comprehensive electric rate reform in the state well, before these recent high bills, and in even our legislation that we're going to be pursuing to remove some programs out of the bill. That is something that we had contemplated, you know, already, but I think this puts an explanation point on it, and why we want the the state to be moving really fast on this bill.

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Shannon Handy, CBS 8  

Now, you say that you're trying to take the steps to reduce the cost for people eventually. And we talk about inflation. When you look at someone's bill, though, you do warn ratepayers, that rates would go up. But when you look at someone's bill, it's not just about their usage, how much electricity they're using, or gas, we see all these other fees and all these other programs. I mean, in layman's terms, can you explain to people why are we paying so much outside of gas and electricity?

Scott Crider, SDGE  

Yeah. So you know, Shannon, if we look at the most recent high bills, let me start there first, and there's a couple of key drivers, one, the price of natural gas has risen globally. You know, it's kind of like that. It's like gasoline, where it's really a global price. And we've seen coming out of out of, you know, out of the pandemic, and we've seen these inflationary pressures on other commodities. Well, the same thing is happening to natural gas right now. And so what we saw in January, his prices were about 25%, higher than January of 2021. And then you couple that with the coldest December that San Diego had experienced in five to 10 years, and it colder than usual January. So this combination of higher natural gas prices coupled with colder than usual temperatures, where customers are using more heat, you know, for their homes and natural gas to heat their homes. That that is a primary driver of why, you know, customers experienced higher than normal bills this time of year.

Shannon Handy, CBS 8  

But if natural gas only went up about 25% Yet we're hearing from people whose bills are 50%, higher, 100%, higher, 200% higher. How do you explain that? How does the math make sense? Yeah. So you know, every it's always difficult to kind of speculate without seeing a particular customers bill, because so much goes into to gas and electricity pricing here in the state of California. So it really depends on you know, does the customer have any, you know, what's their comparable usage compared to a year ago? Are there what's priced? What's the pricing plan that they happen to be on for for electricity, and because some of those times, you know, we're prices are higher in certain parts of the day so, but what our customers should do is when they get an unexpected Hi, Bill, we're here to help and what they can, you know, call you know, call our Customer Contact Center. We have lots of resources on sdge.com, and we want to make sure that they're first of all, taking advantage of all the programs and savings that we offer to customers. We want to make sure that they're on the right pricing plan. And those those are those are items that can go a long way to helping to manage their energy bill.

Shannon Handy, CBS 8  

We talk about gas and electricity. But the reality is you guys SDG&E makes money off of capital projects. There's a percentage that you make off of these projects. I know SDG&E has done a great job moving lines, underground, things like that. But how do you, explain why the cost of these projects are being passed along to us ratepayers?

Scott Crider, SDGE  

That's how California does electricity investments. And so, but what I think our customers are really interested in is what is the value that they're getting. And we've always acknowledged that we have higher rates, you know, then than other parts of the state here. But you know, here's what our customers are getting for their money is number one, we're the most reliable utility in the nation last year, and the most reliable utility 16 years in the row for the western United States. We are amongst the cleanest utilities in the country with more than 40% of our energy coming from renewable energy resources, like solar and wind, you mentioned it, we have about 60% of our system is actually underground. So that's better for safety, that's also better for the aesthetics of our neighborhood. And then finally, you know, SDG&E has set the bar for wildfire safety. You know, we've invested more than $3 billion over the last decade to make sure that our facilities do not cause a major wildfire, major wildfire. And I'm proud to say that we've we've been very successful there, we've set the bar for not only the state, but the nation, and other utilities are really following suit with us.

Shannon Handy, CBS 8  

And I give you guys credit for that. We know how much you have worked to make this a safe company. But is it going to get to the point because you're already ahead of the game, where it just stops and you say, Okay, we've done well, with infrastructure projects, now we can start dropping these rates or dropping these projects, because we've already put, you know, 90% of lines underground. I mean, when does it stop? Does it just continue to climb forever?

Scott Crider, SDGE  

So here's the challenge that not only facing SDG&E, but all the utilities in the state and for the state of California, is it to your point, how do we balance affordability with the need to really have a radical transformation of our electric grid, you know, we are trying to integrate up to 100% renewable energy into the grid. And this is important for climate change. I mean, I think what we've already seen over the last couple of weeks, where we had record rains in December, and then we had the hottest day ever recorded in February. So what we need to continue to do is investing to make sure that our electric grid can handle hundreds of 1000s of electric vehicles, that we can have a climate resilient grid that can accept or be able to deliver all of this renewable energy, we need to add more battery storage to make sure that the system and the grid stays stays stable, because, you know, customers expect, you know, two things is one is they want a reliable grid. They want a reasonable bill Bill. And they increasingly that they want to make sure that the utility that serving them is clean. And, you know, I'm proud to say on the reliability and in the clean is that we are amongst the best, you know, in the country. And as it relates to rates. You know, we've always acknowledged again that we that we have high rates, but the interesting point is SDG&E actually has the lowest average electric bill for residential customers in the state of California, compared to the other large electric utilities. And our electric bill is actually below the national average. So while we have higher rates are bills on average for residential customers, is lower than what most customers are paying in the United States.

Shannon Handy, CBS 8  

Do you ever see these bills going down?

Scott Crider, SDGE  

You know, that's certainly our hope, you know, you know, we'd love to see bills go down. But you know, the, the challenge is, you know, what I just laid out is, you know, we need this massive transformation of the grid in order to start building more climate resiliency in now, one thing that's going to be helpful, you know, years down the road is, you know, as we add more electric vehicles, as we add more, you know, electricity use in in homes and buildings, as we see that electricity, electricity use grow. You know, there is the potential that, you know, we could see some stabilization, you know, down the road, because as we're using more electricity, we have more sales in order to pay for that infrastructure.

Shannon Handy, CBS 8  

SDG&E has said consistently that you don't set the rates the PUC does but it seems as though every time you go to them with a proposed rate increase it never gets denied Have you ever been denied a rate increase?

Scott Crider, SDGE  

I'm sure we've been not we've been denied projects, which they certainly could impact rates and so like that our regulators have a you know, challenging job. You know, the commissioners for the Public Utilities Commission again they're balancing affordability with this need to have the state rat, again, rapidly transform to a increasingly more clean grid and to ensure reliability. And so interestingly, though, is I'm actually going to be representing the company at a two days of meetings. Talking about this exact issue with legislators and regulators and consumer advocates and utilities are really coming together to really talk about this exact issue. How can we continue to invest in the grid? How can we continue to meet our climate goals while at the same time, same time trying to balance affordability for customers.

Shannon Handy, CBS 8  

From what I understand SDG&Ehas the opportunity to go to the PUC in the spring, I believe April to ask for higher rates. Do you intend to do that?

Scott Crider, SDGE  

I'm not sure what you're referring to.

Shannon Handy, CBS 8  

So SDG&E can go to the PUC right and say we would like to increase our rates? Correct. I'm just trying to explain to people the process. So is it SDG&E or Sempra has intention to go to the PUC at the next possibility or the you know, the next time they're able to and ask to increase rates?

Scott Crider, SDGE  

Yeah, so maybe for your viewers, it's let me explain how rates can get can get set, there's really probably two or three primary ways one is we can utilities. And this isn't just SDG&E. But see other utilities in the state can file what's called a general rate case. And that's where we make a case to the Public Utilities Commission, in terms of what we need to invest in reliability, safety, climate resiliency, etc. And number two is, you know, utilities can file applications for various projects in order to if we needed to add some more battery storage, for instance, you know, we can file an application and that can affect rates. But the third way is also were directed by either the legislature or the Public Utilities Commission to go do something, you know, if they recognize that there may be a reliability risk in the hottest summer days in August, and September, they may direct us to actually go out and purchase some more energy or some more battery storage in order to fill that gap.

Shannon Handy, CBS 8  

Okay, so let's talk about solar. Obviously, a lot of people are turning to solar. And that's great for the environment, not necessarily great for you guys, as a company, that's profiting because you have less people now, to pay for things. And so a lot of us customers feel as though because more people are going to solar, the rest of us are kind of footing that bill. But in that money that you've lost talk about the challenges here.

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Scott Crider, SDGE  

Yeah, well, first of all, it's fantastic that so many of our customers are turned into solar a matter of fact, we have about 17% of our customers have solar today. And we're going to continue to see that growth. And that's fabulous for the environment. And in what a lot of our customers don't understand is that that does not have a financial impact on us at all. So we're completely indifferent. When it comes to customers putting on solar, we support our customers adding solar, it can help them lower their energy bills, it's better for the environment. And it's a critical component of our overall climate plan. And ultimately, our goal to get to net zero greenhouse gas emissions by 2045. So we see the solar story as being one that we need to see continued growth. Now, I will say that we want to make sure that, you know, the how we how we pay solar owners for their energy, there's a balance, because we want to make sure that non solar owners aren't footing the bill, you know, for them. So the Public Utilities Commission is continuing to look at that issue very closely.

Shannon Handy, CBS 8  

You say you support solar and you hope more people go to it. But the reality is more people go to solar, SDG&E loses out on those regular bills, right, because they're not paying as much so how are you balancing that? Can you kind of give us more specifics?

Scott Crider, SDGE  

Well, I think it's important for customers to understand is SDG&E doesn't make money based upon how much electricity we sell. So that you know the the bottom line on your bill if it's higher in January, like we've seen, especially with with with natural gas increases, that that doesn't that doesn't enable STG need to make any more money. So, so again, for solar, we're financially indifferent, but we're strongly supportive of our customers continuing to add solar to the you know, you know, to their homes and businesses. And again, because it's the right thing to do for the environment and it can help them save money.

Shannon Handy, CBS 8  

There's a lawmaker and maybe a couple at this point. But Assemblywoman Tasha Boerner Horvath who we've interviewed, and she said she wants to ask for an audit of sdg&e. What's your response to that?

Scott Crider, SDGE  

We'd welcome it. And you know, in quite frankly, you know this this affordability challenge is not an SDG&E issue. This is a state of California issue that's also affecting the other utilities. So, you know, what I would you know, ask all the legislators who are weighing in on this issue is when we can get our our bill introduced in the legislature to remove some programs. This is this can be a, this would be an important decision for them to make in order to, you know, help support our customers.

Shannon Handy, CBS 8  

I think what's hard for people, for our viewers, for ratepayers' is that they see what the profit is. And I know a lot goes into the profit, the $9 billion number we've been talking about. And they say, how do you justify that much money? Why can't we as customers? Why can't you cut us a break? And give us a discount if you're making all this money?

Scott Crider, SDGE  

Yeah, so and I know that profit is one area that a lot of people focus on. I think what our customers are also looking for, again, is what is the value that that they're actually getting? You know, what is the utility that serving them doing in terms of reliability? And as I mentioned, we're number one in reliability, what are they doing to address climate change? We're adding more solar and wind and battery storage and hunt and 1000s of electric vehicle chargers in San Diego. And then what are we doing in wildfire safety. And you know, again, we've, we've led the pack, you know, here in the state, as you know, others have struggled and really to set the bar extremely high to make sure that when customers are thinking about sdg&e. They know that they're going to get a safe system, they're going to get a reliable system. And they're going to get increasingly clean system.

Shannon Handy, CBS 8  

And I did touch on this, but just to explain this in more simple terms, once you've raised the bar, but once you get there, once you get to that level where you have sustainability, and you have all your projects underground. Isn't there a point where you say, okay, customers, now we can drop rates, we don't have to do as many projects, because we've reached the point where we've done all we can whether it's 10 years from now, 20 years from now? I don't know.

Scott Crider, SDGE  

So obviously, a lot is going to change with you know, given how fast climate change is, is occurring. You know, in terms of speculation on when the projects will end? I don't know, you know, it's it's this is going to be a journey of innovation for the state. Now, what we are focused on is, what can we do to manage the cost of these projects? So for instance, in you know, in the back country, we're investing for wildfire safety. You know, we're not putting everything underground, you know, we're putting some areas underground, we're adding micro grids to some areas to help them to keep some areas of the region, energize. Even if we have to turn the power off. We're adding more steel structures instead of wood structures. So we go through a very detailed review of how can we get the most reliability? How can we get the most safety at the lowest cost possible. So it's really an analysis that we do across the board, in addition to making sure that, you know, like any family is that we're managing our own budget effectively, that, you know, we've got 4600, you know, men and women who come to work every day with a singular focus. And that's to deliver the cleanest, safest and most reliable energy that we can, but we need to make sure that we're continuing to keep our belts tightened as well, just like other families are doing, and in making sure that we can deliver the energy at the most affordable price possible.

Shannon Handy, CBS 8  

As you know, you've probably seen a lot of our stories CBS 8 viewers say they just don't trust SDG&E. They think they're being cheated. What do you have to say to that?

Scott Crider, SDGE  

Well, again, I understand their frustration right now. You know, anytime that you get an unexpectedly large bill, we know we hear again, we've heard from 1000s of our customers, so I understand their frustration, and quite frankly, you know, we could have done a better job at preparing and educating our customers. And I take personal responsibility for that, you know, that that's it, that's something that we're going to continue to learn from, and we're going to do better really, really going forward.

Shannon Handy, CBS 8  

And that you probably just answered my next question. But looking back at these last several weeks that people have been complaining, is there anything you would have done differently?

Scott Crider, SDGE  

You know, Shannon, we did communicate with our customers, and we certainly let them know about rate changes. I think where we could have done better is seeing the combination of higher gas prices in the market with this record cold that we saw in December. I think we could have done a better job at at linking those two things together for our customers. And so that's certainly that we're going to go back and take a look and figure out how we can do better going forward.

Shannon Handy, CBS 8  

I know this is a complicated issue. There are a lot of cooks in the kitchen. Right. And some people say, well, we voiced our concerns to SDG&E. We voiced them to Sempra, and nothing has changed. Do people have to go to the Governor or their state legislators to have more control over these rates? Or what does the average person do?

Scott Crider, SDGE  

It's important for customers to understand that, you know, rates are set in a public proceeding. So anything that SDG&E or any of the utilities in California, anything that they do, we need to get permission, you know, from the Public Utilities Commission. So anytime we're seeking projects, if if we have a rate request, it's all done in a public setting with lots of of parties that can be involved. But you know, for our for our customers who don't have time, you know, they're busy raising families and going to work every day. You know, what I will ask for them is that once we can get this legislation to remove some energy programs out there, Bill, we're gonna find ways that they can get involved and call on their state legislator to support that bill.

Shannon Handy, CBS 8  

But the reality is SDG&E is a business. So you guys lobby for these higher rates, and you lobby for these projects that you're making money off of?

Scott Crider, SDGE  

Yeah, well, we certainly are engaged with our legislators and our regulators on projects to make that that we actually the region needs to, again, ensure reliability, and to integrate more and more wind and solar resources. And so it's really about you in the state setting, in objective. And that's to have 100%, carbon free electricity by 2045. Even here, locally, the city of San Diego, they want to try to get to zero carbon by 2035. We're supportive of this rapid move to lower carbon energy to address climate change. But we're going to have to as a region, also recognize that upgrades and more investments are going to be needed really going forward.

Shannon Handy, CBS 8  

What do you have to say to people who simply can't afford their bills right now,

Scott Crider, SDGE  

We've got lots of programs for our customers. Number one, there's about a third of SDG&E residential customers that today get a 35% discount if their income qualified. So we always want to make sure that if a customer is struggling to pay their bill, which there are a lot right now, I mean, we recognize this is a tough time, you know, for families. And so what we're asking customers is to call us, let's see if we can, if you qualify for this bill discount, we also in working with the state secured $62 million to help offset some debt from, you know, from the pandemic that people that our customers accumulated, we worked with local governments to secure 15 million additional dollars in COVID debt relief. And so we've got lots of of programs that customers can take advantage of. And so we're asking them to give us a call, and we're going to see if we can help them.

Shannon Handy, CBS 8  

That program you mentioned where people who can afford their bills, get a discount? The rest of us pay for that, right?

Scott Crider, SDGE  

That's right. So and that's, you know, it's not unique to California, but this is certainly something that's that a lot of our customers, you know, don't don't know about is that, you know, again, about a third of our customers get a significant discount. It's needed, you know, the state of California, this is an expensive place to live. And here in San Diego, our cost of living is even higher than most other parts of the state. So it's a it's a program that we're supportive of, because working families need the help they need the support. Yes, the rest of our customers pay for it. But we think that's an important investment to make.

Shannon Handy, CBS 8  

Some of those customers who pay for it, though, don't think it's fair. They say why should I pay into this program for other people? Why doesn't the state pay for or Semper give their own profits towards that?

Scott Crider, SDGE  

That's interesting. That's you know, the the legislation that I mentioned earlier, that would actually pull out you know, part of those energy programs would be the the low-income discount that we have, that would actually be paid, paid for by the state. Now, let me be clear, we think whether it's in the bill, or the state paying for it, low-income programs are essential to working families here in San Diego County.

Shannon Handy, CBS 8  

We have been doing these stories at CBS 8 for several weeks, and we've asked to sit down with you guys and do an on camera interview. And it's taken a long time. Why now?

Scott Crider, SDGE  

Well, look, we think that customers have a lot of questions right now. And, you know, we want to make sure that they understand directly from us what we're doing about higher bills, what we're doing about affordability And also what we're doing to invest in the grid to ensure reliability and a clean grid, and to ensure that it's done safely.

Shannon Handy, CBS 8  

But why did it take so long? Customers should have known about this a month ago when we started doing these stories and making these requests?

Scott Crider, SDGE  

Yeah. So, look, there's lots of ways that we can talk to our customers. And so, you know, we've certainly been continuing to engage with customers, whether it's social media, whether it's talking to them in our, our Customer Care Center, you know, there's all there's always, you know, lots of news outlets as well. And so, you know, we're, we're taking this opportunity, though, just to make sure that, you know, customers hear directly from us that, you know, if they have questions that they understand that we're, you know, that we're here to help them and that we've got, you know, some options that we can look at.

Shannon Handy, CBS 8  

I'm here as the voice of our viewers, but I also appreciate you sitting down with me, and I want to give you the floor. Is there anything you want to say to our viewers, to your customers, or anything else?

Scott Crider, SDGE  

Yeah. So, you know, again, it's the way that I started is, we're listening. Okay, so we have heard loud and clear from our customers that the value, I think some of the investments that we're making, they value, the reliability that we provide the value, the amount of clean energy, that, that we provide the value, the safety that we deliver every single day. But they also made it clear to us that, you know, affordability has to be part of the equation as well. And so, um, you know, in terms of, you know, the message to your viewers and our customers, is that we hear you loud and clear. And we are going to be continuing to engage very actively with our legislators and our regulators, and really pursuing comprehensive rate reform, trying to get, you know, some of the costs out of the bill, and continuing to make sure that the investments that we're making are very prudent.

Shannon Handy, CBS 8  

It's a tough pill to swallow, though, because the work is being done. But we don't know the results, I can't come away from this interview and say, next year, your rates will go down two years from now, we just don't know.

Scott Crider, SDGE  

Yeah, and that's always a difficult, you know, it's always a difficult forecast to make, you know, rates rates are very complex here in California. And again, a lot of some of this is is being directed, you know, by the Public Utilities Commission, or the state legislature. So, I think that what we can do, though, is that, you know, we're going to continue to provide updates, you know, to our customers, as a matter of fact, we're going to be, you know, launching here in the coming days or weeks is a new website with more information about, about rates generally, about what has gone on the last couple of weeks, and then ultimately, what we're going to be doing about it. So we think that this is going to be one way that we could try to keep our customers updated more often. And really help, you know, to help navigate this issue, which is, you know, really a statewide issue.

Shannon Handy, CBS 8  

And I just want to go back to the natural gas shortage, say the shortage ends six months from now, will we see that price, that distribution price and the cost of natural gas go down for the rest of us on our bills?

Scott Crider, SDGE  

Yeah, so here's the difference with gas prices versus electricity prices, gas prices, change every month. And so what we've already seen is from the January peaks into the February pricing, it has already started to come down. So that's really good news. And then it's important for our customers to understand, though, is, you know, if we buy gas for $1, we sell it for $1. So as we've seen the price of gas go up, you know, sdg&e isn't making any more money or any profit on that. But the good news is that we looks like we've worked through the peak. And then as we look into the springtime, naturally, natural gas markets continue, the price can, you know is generally lower in the spring going into the first part of the summer. So we're hopeful that we're gonna see some relief on the gas side here in the coming months.

Shannon Handy, CBS 8  

Okay, that's good news. And finally, although I may come up with a couple more questions, but you sell the natural gas for what you pay for, so there's no profit there. And you say we, you know, don't set the rates and we don't make the money off the gas and electricity. Is SDG&E profits, mostly based on capital projects? Is that where the profits are coming from? Can you be transparent and tell customers that? Yeah, well,

Scott Crider, SDGE  

it's not just SDG&E. It's every utility in California that's regulated by the Public Utilities Commission. The way that the they have set up the market here in California, is you know, a lot of a lot of states if you make money based upon the amount of gas and electricity that you sell. We in California decided decades ago to not do that, because what we wanted to do is incentivize conservation, incentivize energy efficiency. So we didn't want to be, you know, have utilities make money based upon how much you're selling. But you know, for all utilities under the Public Utilities Commission it is, you have the opportunity to earn a return based upon the amount of pipes and wires that you're actually building for the system.

Shannon Handy, CBS 8  

And I keep going back to this, because a lot of people will say, well are they just coming up with these projects? So they can make money? Are? Do we really need all these projects? Or is it just about making money for SDG&E?

Scott Crider, SDGE  

it's not just about making money. I mean, this is, again, what I, you know, talked about earlier, it's wildfire safety investments to make sure that our facilities don't cause a fire. It's investment in electric vehicle chargers to make sure that we can support this massive transportation kind of revolution that we're going through and moving away from gasoline to electricity, it's reliability projects, you know, if you think about, you know, our customers don't always see you know, when our men and women are going on scene to, you know, to fix a pole or to repair you know, to, you know, to repair a wire or install a new, a new a power line, you know, to a new community. Those are all things that are that are absolutely needed. So, no, this isn't, this isn't just about you know, SDG&E making money. This is about investing in a grid for the future.

Shannon Handy, CBS 8  

Well, Scott, I appreciate your transparency and sitting down with me.

 

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