San Diego’s utility rate hike request will be decided by California regulators
California utility regulators are mulling 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 by the San Diego utility is asking the California Public Utilities Commission to raise the cost of providing electricity by about 8 percent and raise local gas rates by just under 6% next year.
Regulators will consider the request and could make adjustments before the changes are finalized.
SDG&E officials, at a San Diego City Council meeting this week, said the increases would add about $20 to a monthly electric bill. The utility typically sets next year’s rate in the spring, but the company is asking for a nearly $250 million upward adjustment to its projected revenue forecasts.
A company official told members of the San Diego City Council that the rate hikes are necessary to cover wildfire prevention costs, a new $300 million billing system, battery construction at the scale of public services and electric vehicle infrastructure.
“We are seeing a continued increase in the need for infrastructure investment driven in large part by $3 billion in wildfire safety spending,” said Scott Crider, senior vice president of SDG&E. “And at the same time we are seeing a decrease in sales, approximately 2% of our residential customers. And the reason is largely because of the solar power on the roof.”
Crider said rooftop solar cost the company 2 percent of its expected revenue, but said the company needs to see more solar installed in the region to help the company meet its goals. greenhouse gas reduction objectives.
Twenty percent of SDG&E customers have rooftop solar, and Crider said it needs to go up to 50 percent.
The utility said the rate increase is necessary to pay for the cost of supplying electricity, not the cost of electricity.
The U.S. Bureau of Labor Statistics found that San Diego has the second-highest average electricity price in the country, behind Hawaii.
The price of electricity in San Diego was just over 40 cents per kilowatt hour. The national average price is 16.7 cents.
How the price increase will play out in San Diego is a bit unclear. Tens of thousands of customers have joined the community’s aggregators of choice in the past year.
The San Diego Community Power and Clean Energy Alliance buys the electricity that SDG&E then delivers.
“Once San Diego Community Power determines their rates for next year, if there are any changes, we can do a full bill forecast. But we wanted to share what the delivery rates will 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 electric and gas rates by about 9% if regulators approve the request.