SDG&E; Cites Increased Competition as It Cuts Costs by Eliminating 85 Jobs

San Diego Gas & Electric Co. on Tuesday said it has eliminated 85 jobs as part of an ongoing cost reduction program that previously terminated about 100 other jobs.

SDG&E;, which will probably eliminate about 30 more jobs by next spring, said the cutbacks are being forced by increased competition from industrial customers who are generating their own, lower-priced electricity.

The utility began the job elimination program “as part of an overall program to reduce rates and meet our competition,” said Chief Operating Officer Jack Thomas. He said SDG&E; wants to reduce its per-kilowatt-hour electric cost to 10.8 cents by the end of 1987. SDG&E;’s per-kilowatt hour charge was 12.5 cents at the end of 1985.

However, SDG&E;’s electric rates will not be “substantially” reduced by the job eliminations, according to Thomas, who said lower rates are linked to SDG&E;’s successfully trimming back its fuel bills and other operating and maintenance expenses.

SDG&E; will realize some savings by dismantling the independent gas and electric marketing departments which were created just over a year ago. SDG&E; created the two distinct marketing operations to better market its gas and electric products and services. The two departments will be combined, and some marketing positions will be eliminated.

Employees in positions that are being eliminated can accept severance pay or “attempt to bid on an opening in a job that has not been eliminated,” company spokesman David Smith said.

SDG&E;, which ended last month with 4,907 employees, had 4,901 employees at the end of November, 1985. Smith said that SDG&E;’s normal attrition rate is about 20 employees per month and that some employees in eliminated jobs have been given other jobs.

SDG&E; hopes to handle future job eliminations through attrition, according to a company newsletter distributed this week.

“We’re trying to position ourselves for competition in an increasingly deregulated arena,” said Thomas. “We don’t like to be reducing staff, but it’s an appropriate response.”

In announcing the cutbacks to employees, the utility made reference to the possibility that it will lose the U.S. Navy, its largest electric customer. The Navy, which generates 10% of SDG&E;’s revenues, is studying the feasibility of generating its own, lower-cost electricity.