SDG&E Files Required Proposal With Regulators That Includes Infrastructure Investment

Safeguarding energy reliability against growing climate threats and building a clean energy future aligned with regional and state climate goals are the driving forces behind the 2024-2027 budget proposal that San Diego Gas & Electric filed May 16 with the California Public Utilities Commission (CPUC). 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.

“Average electric bills at our company are the lowest among California’s electric investor-owned utilities, but we also recognize this is a difficult time to ask our customers to pay more given the state of the economy and inflationary pressures and are mindful of every dollar that we ask our customers to pay. Given the changes in climate and the growing need for a clean energy future, this will ultimately result in improvements that create long-term benefits now and for future generations,” said  Bruce Folkmann, president, SDG&E. “The budget proposal we put forth represents the conscientious efforts of hundreds of SDG&E employees to strike the right balance between holding down costs and making the infrastructure investments needed for a clean energy future.”

According to a recent study conducted by SDG&E titled The Path to Net Zero: A Decarbonization Roadmap for California, electrification of buildings and vehicles is crucial for California to become carbon neutral. The analysis indicates electricity consumption in the state could nearly double by 2045. Meeting this increased demand will require a significant expansion of the power grid to both meet emissions reduction targets while also maintaining grid reliability.

All general rate cases are open and transparent proceedings conducted before the CPUC, involving extensive comments from customers, stakeholders and public interest advocates.

Major Investments Outlined in the Budget Proposal

• 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.

If SDG&E’s rate case is approved as submitted, the average residential customer could expect a monthly electric bill increase of about $9 compared to 2023, and a monthly natural gas bill increase of about US$ 9.60 compared to 2023. SDG&E anticipates the CPUC to make a decision on its GRC in about 18 months, with new rates taking effect Jan. 1, 2024.

More information about SDG&E’s filing can be found at here..