San Diego Gas & Electric had its most profitable year ever in 2023, making $936 million according to figures filed with the U.S. Securities and Exchange Commission on Tuesday by SDG&E’s parent company.
That’s $21 million higher than the earnings recorded in 2022, when the utility reported a then-all-time high of $915 million.
SDG&E is a subsidiary of the San Diego-based Fortune 500 energy company Sempra.
“Turning to 2023, it was a strong year of operating and financial performance for our company,” Sempra CEO Jeff Martin said during Tuesday’s quarterly earnings call with utilities analysts at various Wall Street firms. “And in large measure, (it) is a credit to our corporate strategy and our success in simplifying our business model.”
Profits have become a hot topic as utility bills across California march steadily higher.
A recent analysis by the Union-Tribune showed SDG&E profits rising sharply in the past 20 years. The utility has attributed the growth primarily to infrastructure projects that help prevent outbreaks of deadly wildfires, maintain reliability for an increasingly complex power grid and meet California’s ambitious decarbonization goals.
News of the 2023 earnings comes as a group dubbed the Power San Diego Campaign calls for the city of San Diego to create its own municipal utility that would replace SDG&E.
About 30 of the group’s ers demonstrated in front of Sempra’s headquarters Tuesday morning.
“We think (SDG&E) profits are egregious,” said Craig Rose, a volunteer for Power San Diego. “They’re charging nearly the highest rates in the country.”
In an email, a Sempra representative said rising bills remain “top of mind to us.”
“As we look to make significant investments for climate and reliability, we also have programs in place across our companies to improve productivity and efficiency, all to benefit customers … We recognize there is always more work to be done,” the statement said. “Cost inflation is impacting customers from the gas station to the grocery store, and we are focused on doing our part to help affordability for consumers.”
Even the mere posting of the year-end figures sparked a debate.
In the past, SDG&E’s numbers were included in Sempra’s quarterly earnings report. But the report released Tuesday did not list SDG&E’s figures. Instead, it combined the annual returns for SDG&E and its sister utility, Southern California Gas, under the heading “Sempra California,” which came to $1.747 billion.
The specific SDG&E earnings of $936 million were released later in the day in Sempra’s annual 10-K filing with the SEC. Los Angeles-based SoCalGas made $811 million last year, according to the 10-K.
Critics accused Sempra of trying to hide SDG&E’s year-end profit numbers.
“Every quarter they tell you how much SDG&E earned; they didn’t do that this year,” Rose said Tuesday morning. “We think the reason they didn’t tell you was because they may have earned about $1 billion dollars.”
Sempra officials denied that, saying the company announced three months ago it was thinking about combining SDG&E and SoCalGas numbers into a single segment as a matter of simplicity, given “the geographic and regulatory overlays between the two companies.”
The change was made effective to the fourth quarter earnings call, with SDG&E and SoCalGas individual numbers posted in the 10-K.
The Sempra California name is being used only for financial reporting purposes, Sempra officials said, and does not impact how SDG&E and SoCalGas individually manage and operate their businesses. Both SDG&E and SoCalGas remain their own legal entities.
Under the Power San Diego proposal, SDG&E would be ousted within the city limits of San Diego and replaced by a municipal utility that would handle all the responsibilities of electricity distribution.
The campaign wants to put the question before voters this fall.
For the proposal to get on the ballot, the Power San Diego Campaign needs to collect 80,000 valid signatures from voters who are ed within the city of San Diego. The campaign said it has garnered about 10,000 signatures so far.
The ballot initiative has led to the formation of two rival political action committees.
The Power San Diego PAC has raised $156,670 since last year, according to the city’s campaign finance disclosure portal.
Opponents of creating a municipal utility have created their own PAC, called Responsible Energy San Diego.
The group is co-chaired by the San Diego Regional Chamber of Commerce, the San Diego & Imperial Counties Labor Council and the Asian Business Association. Responsible Energy San Diego also has the backing of groups including the County of San Diego Black Chamber of Commerce, the San Diego County Hispanic Chamber of Commerce and the San Diego Working Waterfront, which represents industry on port tidelands.
But according to city filings, all contributions so far have come from SDG&E — and the utility has thus far spent a considerable amount to try to defeat the initiative.
The city’s financial disclosures show SDG&E has thus far contributed $500,000 to Responsible Energy San Diego. The most recent contribution came on Feb. 16 when the utility donated $200,000.
“I would see (SDG&E’s spending) as almost a backhanded compliment,” said Power San Diego chair Bill Powers. “They’re worried, so they’re pumping money into the PAC to stop us.”
The spending comes from Sempra shareholder funds, not SDG&E ratepayer dollars, Responsible Energy San Diego officials say.
“Power San Diego initiative is a costly gamble that puts taxpayers on the hook for billions of dollars in debt with no real plan and no guarantee of benefits,” Responsible Energy San Diego spokesperson Matt Awbrey said in an email. “Burdening the city with this service in addition to its existing responsibilities like infrastructure and homelessness is risky and could compromise grid reliability.”
IBEW Local 465, the union that represents roughly 1,500 SDG&E employees, has forcefully opposed the drive to create a municipal utility, saying it would jeopardize the jobs of its .
Power San Diego officials insist that a new power company would protect union workers and contracts.
Backers say making the switch will result in San Diego customers seeing about a 20 percent reduction in their electricity bills and point to the Sacramento Municipal Utility District and the Los Angeles Department of Water and Power as models of publicly held utilities that offer lower rates for customers.
Power San Diego estimates it would take $3.5 billion to create a public utility and buy out SDGE’s electricity distribution assets — plus associated metering and startup costs. The group calls for ing a bond that would establish a standalone enterprise fund.
The group reckons the residential customer portion of the $3.5 billion would work out to less than $15 per month. ers argue that residential customers are already paying that much or more under the current system and predict there would no incremental cost exposure to the city ratepayer.
Responsible Energy San Diego disputes such a scenario. Its website says, “it makes no sense to burden taxpayers with billions of dollars in new debt when the City is already facing a $1 billion deficit.”
Power San Diego’s signature drive runs though the middle of May. To get the petition on the November ballot, the required 80,000 signatures must be certified by the San Diego City Clerk’s Office in July.
