DRA Says SDG&E’s cost of capital request is out of line with today’s market and unfair to customers
August 7, 2012 (San Francisco) – The Division of Ratepayer Advocates (DRA), the independent consumer advocate within the California Public Utilities Commission (CPUC), on Monday presented evidence in the CPUC’s proceeding on Cost of Capital. DRA found that San Diego Gas & Electric Company’s (SDG&E) request for an 11.0% Return on Equity far exceeds both the company’s revenue needs and market standards.
DRA recommends that the appropriate Return on Equity (“ROE,” or the revenue that shareholders can expect to earn on their investment) should be 8.5%, which would result in a $50 million annual savings to SDG&E’s customers. [See Cost of Capital Comparison Chart]