California utility regulators are mulling over a rate hike request from San Diego Gas and Electric. The local utility, which serves electricity and natural gas customers in the San Diego region, wants to raise rates in 2023.
A regulatory filing submitted by the San Diego utility asks the California Public Utilities Commission to raise the cost of delivering electricity by about 8% and increase local gas rates by just under 6% next year.
Regulators will consider the request and could make adjustments before any changes are finalized.
SDG&E officials, at a San Diego City Council meeting this week, said the increases would add around $20 to a monthly power bill. The utility company typically sets the next year’s rate in the spring, but the company is asking for a nearly $250 million upward adjustment to its expected revenue forecasts.
A company official told San Diego City Council members that the rate hikes are needed to cover wildfire prevention costs, a new $300 million billing system, construction of utility scale batteries and electric vehicle infrastructure.
“We’re seeing continued increases in the need for infrastructure investment largely driven by $3 billion in wildfire safety spending,” said Scott Crider, a senior vice president at SDG&E. “And at the same time we’re seeing a decrease in sales, about 2% from our residential customers. And the reason why is largely because of rooftop solar.”
Crider said rooftop solar cost the company 2% of its expected revenue, but he said the utility needs to see more solar installed in the region to help the company reach its greenhouse gas reduction goals.
Twenty percent of SDG&E’s customers have rooftop solar and Crider said that needs to climb to 50%.
The utility said the rate increase is needed to pay for the cost of delivering electricity, not the cost of electricity.
The U.S. Bureau of Labor Statistics found San Diego has the second highest average electricity price in the country, behind Hawaii.
San Diego’s electricity price was just over 40 cents per kilowatt hour. The national average price is 16.7 cents.
How the price hike will play out in San Diego is a bit unclear. Tens of thousands of customers have joined community choice aggregators in the past year.
San Diego Community Power and Clean Energy Alliance buy the electricity that is then delivered by SDG&E.
“Once San Diego Community Power determines its rates for next year, if there’s any change then we can do a full bill forecast. But we wanted to share what the delivery rates are going to be for SDG&E,” Crider said.
If approved, the October rate adjustment would take effect in January.
SDG&E also has a rate hike request filed for 2024. It would raise electricity and gas rates by about 9% if regulators approve the request.
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