SDG&E to Possibly Raise Rates, Double Digits
Last updated 6/2/2022 at 9:22am
As if San Diego Gas & Electric rates aren’t already high enough, a new potential rate increase is in the works, with customers to possibly look at $18 more per month on their bills.
The proposal is SDGE’s 2024 – 2027 budget, also known as ‘general rate cases,’ which utility companies are required to file with the California Public Utilities Commission every four years outlining their capital investments and forecasted costs for operations and maintenance. The CPUC has directed SDG&E to develop these sort of projects, which are paid for through additional fees on customers’ bills.
“Average electric bills at our company are the lowest among California’s electric investor-owned utilities, but we also recognize this is a difficult time to ask our customers to pay more given the state of the economy and inflationary pressures and are mindful of every dollar that we ask our customers to pay. Given the changes in climate and the growing need for a clean energy future, this will ultimately result in improvements that create long-term benefits now and for future generations,” SDG&E President Bruce Folkmann said. “The budget proposal we put forth represents the conscientious efforts of hundreds of SDG&E employees to strike the right balance between holding down costs and making the infrastructure investments needed for a clean energy future.”
In addition to maintaining high safety and reliability standards, SDG&E’s GRC also supports regional plans to reduce emissions, and the State of California’s goal to achieve carbon neutrality by 2045.
“We obviously think this proposal makes a lot of sense,” said Scott Crider, SDG&E’s Senior Vice President of Customer Services and External Affairs.
If approved, SDG&E’s proposal wouldn’t take effect until 2024, and would increase monthly electric bills by about $9 and $9.60 for monthly natural gas bills. However, before the state’s regulatory agency can enact that hike, customers will have a chance to weigh in. There is an 18-month process before the CPUC approves any rate increases. The first public input meeting will likely be in the fall.
Many SDG&E customers are still reeling from a rate increase that took effect in January of this year. The residential average electricity price increased by about 7.5%. Natural gas price was 25% higher in January 2022 compared to year ago, due to a global surge in the natural gas market. Natural gas is used to generate electricity, so an increase in natural gas prices also affects electricity prices.
Borrego Springs residents pay some of the highest bills, especially during the summer months, where temperatures exceed into the triple digits.
Among other things in the proposal, it outlines infrastructure projects and what rates SDG&E thinks customers should to pay to help fund them. Crider says some of the key projects include adding more charging stations for electric vehicles, putting power lines underground to ensure fire safety, and modernizing the electric grid.
San Diegans already pay the highest per-unit electric costs in the country and consumer advocates are fighting the utility over its profit margins.
So why are SDG&E rates higher than other utilities?
There are several reasons:
- Higher use of renewable energy to address climate change
- Development of the nation’s leading wildfire safety program to keep our communities safe
- Technology subsidies required by the state and paid for by customers, such as Net Energy Metering, increase electricity costs for customers without Solar by about $260 per year
- Legislative mandates that account for about 24% of electricity rates
- Improvements to ensure the power grid remains reliable even during the few extreme hot days of the year
- Another factor impacting SDG&E electric rates is declining sales. This is a tough one to explain. Because of our mild weather and the amazing job customers have done with conservation and Solar installations, less electricity is being used. - Less electricity use means the cost of the power grid is spread across fewer electricity sales (kilowatt-hours), which results in higher rates. Without this decline in electricity sales over the past decade, rates would be about 17% lower. Many water utilities in San Diego are facing this same challenge.
That’s why SDG&E has the lowest average monthly electric use in the entire country and lower than average bills, but among the highest rates.
In the meantime, you can email, call, or mail the CPUC your thoughts:
CPUC Public Advisor
505 Van Ness Ave.
San Francisco, CA 94102
1 (866) 849-8390