San Diego Gas & Electric Company
List of Deals
San Diego Gas & Electric Company (SDG&E) was founded in 1881 as the San Diego Gas Company and incorporated as San Diego Consolidated Gas & Electric Company in 1905. Standard Gas and Electric Co. owned the bulk of the utility's common stock. In 1910 San Diego Consolidated acquired the United Light, Fuel & Power Co. of San Diego. The utility also built its first principal electric-generating plant that year. It had a monopoly on the gas and electric business for San Diego and its suburbs. The utility grew rapidly; the number of its electricity customers increased by about 12,000 from 1906 to 1912, and the number of its gas customers increased by about 13,000 during that time. The company's sales topped $2 million by 1918.
In 1923 San Diego Consolidated contracted to connect its transmission lines with those owned by Southern Sierras Power Company. Through this agreement, the company assured Southern Sierras of an uninterrupted power supply in the Imperial Valley of southern California should Southern Sierras experience shortages or power failures. By 1927 the company's system included two steam electric-generating stations, and it had signed an electric power interchange agreement with Southern California Edison Company (SoCal Edison). SoCal Edison served parts of the Los Angeles area. San Diego Consolidated's sales grew from $2.6 million in 1920 to $7.3 million in 1929.
In 1932 the company applied to the California Railroad Commission, its regulating body, to replace manufactured gas with natural gas in its service area. The application was approved. At that time, the utility was serving a population of 222,000. Two years later, San Diego Consolidated bought a small share of the power produced by the Boulder Dam. The utility's sales dipped somewhat during the Great Depression, dropping to $6.8 million in 1934, but growth resumed the following year. The company remained profitable even during the worst years of the Depression. In 1939 the company entered a new agreement to increase the amount of power it exported to its wholesale customers in Tecate, Mexico. San Diego Consolidated was authorized to export 3.6 million kilowatt hours per year. Previously, the Federal Power Commission had set its export limit at 700,000 kilowatt hours per year. Mexico was to figure prominently in the company's long-term strategic plan.
In 1940, as a result of the Public Utility Holding Company Act of 1935, the Securities and Exchange Commission ordered Standard Gas & Electric to sell all of its utility holdings. This included San Diego Consolidated, which changed its name to San Diego Gas & Electric Company and became publicly owned. By 1949 its sales were up to $23.3 million.
The company requested and received a rate increase in 1954. During the 1950s SDG&E began research into nuclear power, and in 1961 it agreed to participate in a 350,000 kilowatt nuclear power plant with SoCal Edison where SDG&E owned 20 percent of the plant. SDG&E thrived during the 1960s. From 1963 through 1968 it enjoyed the best earnings growth rate among California's four largest utilities, averaging 9 percent annually. By 1970, its ninth consecutive year of record earnings, it was one of the fastest-growing utilities in the United States. By the late 1960s antismog ordinances were hindering the company's efforts to build plants to supply the booming population of San Diego. Fuel oil costs increased in 1970 due to local regulations that required the utility to burn higher-priced low-sulfur crude, and the company began to look elsewhere for its power needs.