Sempra Energy, the parent company of San Diego Gas & Electric, is paying out its highest profits ever to its investors this month.
The upcoming payout to investors on Friday comes on the heels of a massive spike in bills for many SDG&E customers, who already shoulder the highest per-unit electric prices in the country. SDG&E executives blamed inflation and an unusual spike in the cost of natural gas for the higher utility bills. The spikes came after the utility raised its rates for the year.
Why this matters
San Diegans pay the highest electricity costs of any large city in the U.S. San Diego Gas & Electric is asking for rate increases as its parent company, Sempra, pays out profits to its investors.
The payout also comes as consumer advocates say SDG&E’s rates and profit margins, which the utility is negotiating with a state regulator, are too high.
Sempra, whose subsidiaries include SDG&E and SoCalGas, made more money in 2021 than in 2020, bringing in $2.64 billion compared to $2.34 billion, according to a February earnings report. The company’s Texas utility and its subsidiary focused on infrastructure provided most of the growth in earnings, although SDG&E makes the most money for Sempra.
SDG&E brought in earnings of $819 million in 2021, a slight decline from its earnings of $824 million in 2020.
After the report came out, the value of the Sempra stock rose sharply and reached a record high of $170.76 on April 1.
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On April 15, Sempra will pay investors its largest quarterly dividend yet. Investors will get $1.145 for each share they own, up from $1.10 in 2021. Over the year, the company projects the dividend per share to be $4.58, more than ever before and the 12th consecutive annual increase.
Sempra did not respond to repeated requests for comment by deadline, but CEO Jeffrey Martin touted a “long-standing commitment to return value to our shareholders” during an investor call in February.
In an emailed statement, Sempra spokesperson Patricia Kakridas said “every investment is made with our consumers best interest in mind,” citing the company’s efforts to strengthen grid security and reliability.
Kakridas did not respond to questions from inewsource regarding how Sempra will make it easier for customers feeling pressure from the high price of electricity.
The steady increase in dividends is on par with those paid out by Edison International, which owns Southern California Edison, the utility supplying much of Southern California. The company paid out $0.70 per share to investors in January.
Pacific Gas & Electric Co. will pay its first dividends in May after a four year pause following a series of wildfires sparked by its faulty equipment.
Edward Lopez, the executive director of the Utility Consumers’ Action Network, said the record dividends show that SDG&E is profitable for its investor, Sempra.
“Unfortunately, those profits are borne upon the backs of SDG&E customers,” Lopez said.
Help inform our next investigation on energy and environment issues in the San Diego region.
Lopez said that he wished the California Public Utilities Commission, which regulates investor-owned utilities, would take note of the record payouts to investors when considering the utilities’ demands for higher rates.
He said his organization has received many calls from people looking for relief from high bills.
Betty Thompson, who’s lived in Fallbrook since 1989, is currently negotiating with SDG&E over a roughly $200 spike in her bill in December and January, even though she was traveling and out of the home for most of the time. Thompson called the bill “ridiculous,” noting that customers don’t have options to get electricity elsewhere.
“We’re stuck with it,” Thompson said.
“I hope there’ll be enough protests against the company that they will not get a raise in their rates,” she added.
SDG&E will determine its rates after it outlines its upcoming costs to the utilities commission in a state-mandated proceeding no later than May 16.
Customers including Thompson recently received mail from SDG&E notifying them about the utility’s request for an increase in its 2024 electric rates as part of its energy efficiency program.
But inewsource learned those notifications contained errors. A spokesperson said the company determined the average rates will actually go slightly down, not up, after discovering a mistake in the calculations. They plan to send customers a new notice with the correction.
Shareholders can weigh in on some of Sempra’s operations at its annual shareholders meeting on May 13. One of the items up for a vote is a non-binding review of executive compensation.
The total compensation for Martin, Sempra’s CEO, was nearly $25 million in 2021.
Type of Content
News: Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources.