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SDG&E Gets OK to Raise Rates for Project

November 21, 2001|Bloomberg News

Sempra Energy's San Diego utility company can increase electricity rates for 1.2 million customers to recover $2 million it's spending on transmission lines to import power from Mexico, federal regulators said.

San Diego Gas & Electric Co., California's third-largest utility, can bill customers for the expense and a 13% return on the investment over 10 years, the Federal Energy Regulatory Commission ruled. Sempra sought the improvement to avoid blackouts and high prices experienced the last two years.

The project "helps protect consumers in the Western U.S. from supply disruptions and unreasonable rate increases by relieving transmission constraints, thus increasing electric energy supply from an existing source," the commission said in its order.

The FERC asked the utility to provide more information on why it cost $2 million to upgrade the transmission line, after receiving a complaint from the California Public Utility Commission about the project cost.

The investment is part of an expansion of the electricity distribution systems that would allow Western states to import as much as 900 megawatts of power from Mexico, or enough to supply about 675,000 California homes, the utility said.

Comision Federal de Electricidad, which is owned by the Mexican government, plans similar expansions of its transmission system, the San Diego utility said in a government filing.

Increasing the amount of electricity the U.S. imports from Mexico and Canada is part of President Bush's plan to ensure the nation has secure supplies of energy.

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