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 filed by the San Diego utility is asking the California Public Utilities Commission to raise the cost of providing electricity by about 8% and raise local gas rates by just under 6%. next year
Regulators will consider the request and may make adjustments before any changes are finalized.
SDG&E officials, at a San Diego City Council meeting this week, said the increase would add about $20 to a monthly power bill. The utility company typically sets next year’s rate in the spring, but the company is requesting an upward adjustment of nearly $250 million to its expected revenue forecasts.
A company official told members of the San Diego City Council that the tax increases are needed to cover the costs of fire prevention, a new $300 million billing system, the construction of utility scale batteries and electric vehicle infrastructure.
“We’ve seen continued increases in the need for infrastructure investments largely driven by $3 billion in fire safety spending,” said Scott Crider, senior vice president of SDG&E. “And at the same time we see a decrease in sales, about 2% from our residential customers. And the reason why is largely because of the solar roof.”
Crider said the rooftop solar cost the company 2% of its projected revenue, but said the utility needs to see more solar installed in the region to help the company reach its goals of greenhouse gas reduction.
Twenty percent of SDG&E’s customers have rooftop solar and Crider said that should go up to 50%.
The utility said the rate increase is needed to pay for the cost of providing the electricity, not the cost of the electricity.
The US Bureau of Labor Statistics found that 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 increase will take place in San Diego is somewhat unclear. Tens of thousands of customers have joined the community’s choice aggregators in the past year.
San Diego Community Power and Clean Energy Alliance buys the electricity which is then supplied by SDG&E.
“Once San Diego Community Power determines their rates for next year, if there are any changes then we can do a full bill forecast. But we want 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 increase request filed for 2024. It would raise electricity and gas rates by about 9% if regulators approve the request.