Rate Request Subject to Review and Approval by Regulators
On May 16, 2022, SDG&E submitted its 2024-2027 budget proposal, formally known as a general rate case (GRC), to the California Public Utilities Commission (CPUC) for review and approval. The key driving forces for the GRC are safeguarding energy reliability against growing climate threats and building a clean energy future aligned with regional and state climate goals. Every four years, regulated utilities in the state are required to file what are formally known as general rate cases (GRC) outlining their capital investments and forecasted costs for operations and maintenance.
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.
What exactly is a rate case and how is it reviewed?
A general rate case covers a variety of costs such as day-to-day operations and maintenance, infrastructure projects and upgrades, vehicle fleet for crews to respond to customer service requests, a skilled labor force, and equipment such as wires, pipes, poles, transformers, and substations.
All general rate cases are open and transparent proceedings conducted before the CPUC, involving extensive comments from customers, stakeholders and public interest advocates.
How will this rate request affect my bill?
If SDG&E’s budget request is approved by the CPUC as submitted, the average residential electric bill would increase by about $9 per month in 2024 compared to 2023. The average residential natural gas bill would increase by about $9.60 per month in 2024 compared to 2023.
Some of the major investments included in this current general rate case include:
- Expand, operate and maintain electric vehicle (EV) charging infrastructure throughout the region, given all passenger vehicle sales in California are required to be zero-emission by 2035, followed by the requirement that all medium and heavy-duty vehicle sales are to be zero-emission by 2045, where feasible.
- Modernize the electric grid with cutting-edge technology to enable the integration of significantly more solar and wind generation, residential and commercial-scale battery storage, EV charging, and customer transition from natural gas to electric appliances.
- Install more utility-scale battery systems at strategic locations to maximize the use of solar energy, which is often curtailed in the middle of the day because there is more supply than demand, and to support reliable service during periods of high energy demand, such as extremely hot summer days.
- Develop additional clean fuel sources, such as green hydrogen for transportation and electric generation with the goal of supporting greater electrification.
- Reduce wildfire risk and minimize Public Safety Power Shutoffs by hardening 590 miles of power lines between 2022 and 2024, either by burying them underground or insulating them.
- Cut the risk for power outages by adopting grid automation and remote sensing tools and replacing aging or failure-prone equipment, such as underground Tee connectors and corroded overhead switches.
- Give customers more control, access and insights into their energy usage by implementing the next generation of smart meters.
- Upgrade microgrids with zero-emissions energy resources (i.e., battery storage) to keep vulnerable communities and critical resources, such as healthcare and CALFIRE facilities, powered during Public Safety Power Shutoffs.
- Strengthen cybersecurity and technology infrastructure to address the risk of ever-changing security threats that could potentially disrupt business operations and place customer and employee health and safety at risk. These upgrades also will help secure customer data to meet stronger privacy regulations.
- Accelerate the replacement of aging plastic natural gas pipelines to improve safety and reliability and reduce methane emissions.
How will investments included in this rate request benefit customers?
- Fewer power outages than the rest of the country. SDG&E has been recognized as the most reliable electric utility in the West for 16 yrs straight; also named the most reliable in the nation in 2021.
- Grid modernization initiatives that will help build a clean energy future and empower an entirely new ecosystem of clean energy jobs and industries.
- Robust wildfire safety programs that have helped protect our region from catastrophic wildfires and saved customers tens of millions of dollars in insurance costs.
- Safe and reliable natural gas service and 24/7 gas emergency response crews who quickly control leaks and repair damaged pipes to protect public safety and minimize methane emissions.