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CA Electricity Market Continues Trend Toward Separation of Energy Delivery, Electricity Supply


Last updated 7/18/2023 at 12:36pm

The San Diego region has reached a new energy milestone: more than 1 million customers in SDG&E's service territory are now getting their electricity supplies from two local community choice aggregators (CCAs) – public entities created and formed by local governments to replace SDG&E's role of purchasing electricity on behalf of residents and businesses in their jurisdiction.

This major change in the energy landscape has enabled SDG&E to primarily focus on developing and operating best-in-class energy delivery infrastructure for its 3.7 million consumers that links renewable resources, battery storage, electric vehicle charging stations and other clean technologies critical to the clean energy transition and the state's decarbonization goals.

Within San Diego County, approximately 80% of customers now have their electricity purchased by CCAs or other entities – not SDG&E. By the end of 2024, that percentage is expected to increase to about 90%. SDG&E customers who choose not to have their energy purchased by a CCA or another entity will continue to pay only the direct cost of electricity purchased for them with no markup.

"Our mission at SDG&E has evolved but we couldn't be more energized as we focus on building America's most innovative energy grid that delivers a safe and reliable supply of electricity to customers," said Caroline Winn, CEO of SDG&E.

"We expect electricity demand to double over the next two decades, and we're laser-focused on expanding the grid to accommodate building and transportation electrification."

SDG&E now plays a smaller role in the overall cost of residential bills paid by customers who get their energy supply from third parties like CCAs. SDG&E is responsible for proposing rates for consideration by the California Public Utilities Commission for only energy delivery. CCAs are responsible for setting rates for electricity supply. In fact, only about 50% of an average monthly residential bill is related to SDG&E's service, which includes the delivery of electricity, maintaining the power grid and providing customer service related to the delivery of energy. The other half of the average monthly electricity bill is for the electricity purchased by third-party electricity providers, social programs mandated by the state, and required taxes and fees.

Over the past two years, SDG&E has worked closely with 12 local municipalities that elected to take responsibility for purchasing electricity supply for their jurisdictions through the creation of the region's two CCAs - San Diego Community Power and Clean Energy Alliance. Two additional cities are planned to transition in 2024. SDG&E continues to provide metering, billing and customer services to CCA customers. Charges from CCAs for electric generation are included in one utility bill, along with SDG&E charges for electric delivery.

SDG&E has also begun a redesign of its desktop interface for My Account to provide greater billing transparency and improved service. This online customer portal will more clearly display which charges are from SDG&E or the CCAs, provide customer service contact information for each entity, and offer a place for customers to go to pay their bill or analyze their energy use.

The redesign is being deployed in phases and is expected to be completed this summer. As an initial step, the My Account landing page for customers who are served by other entities in addition to SDG&E now features a graphic that breaks down electric charges into three categories: 1) electric delivery charges from SDG&E; 2) electric generation charges from the customer's CCA or direct access provider (SDG&E collects and remits generation charges to those third parties.); and 3) taxes, fees and other mandated charges that go to various government entities and programs. In the future, customers will see dollar amounts associated with each category of charges. SDG&E has also produced a new video that walks customers through the various charges that appear on their bill.

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