Safe and Reliable Energy Service: 2019-2022 Rate Request
Every few years, SDG&E submits a forecast of future costs to the California Public Utilities Commission (CPUC) for operating expenses for a particular term to provide clean, safe and reliable gas and electric service to our residential and business customers in San Diego and south Orange counties.
This proceeding is subject to a rigorous review process by the CPUC, which also includes input from customers and other interested stakeholders.
On August 22, 2019, the CPUC issued a proposed decision regarding SDG&E’s rate request for 2019 through 2022. A final decision is expected within the next 30 to 60 days. Once a final decision is reached, we will be able to provide additional information about rate adjustments and bill impacts.
Customer benefits proposed in 2019-2022 Request
We’re proposing a number of different upgrades to modernize our existing infrastructure to enhance the safe and reliable delivery of energy to those who need it.
- A commitment to safety and security. That means investing in people, infrastructure and technology to deliver even better service, greater reliability and more peace of mind for customers.
- Proactively replacing or discontinuing service of pipeline facilities that have reached the end of their useful life or are experiencing deterioration;
- Increasing the frequency of performing leak surveys and safety and maintenance on more than 14,000 miles of natural gas pipelines; and,
- Supporting our highly trained workforce who patrol, inspect, test, repair and replace the natural gas pipelines.
- Reliable power that’s always on. From the dry cleaner, to the corner store, to your favorite restaurant, a steady flow of electricity is what improves our lives. That’s why we’re requesting to replace and upgrade infrastructure including:
- Upgrading obsolete equipment;
- Upgrading our electric infrastructure to limit the frequency and duration of power outages;
- Improving the safety and reliability of overhead power lines throughout the region; and
- Reducing the risk of damage to power lines and poles in fire-prone areas.
- The latest technology to enable more clean energy in our communities. Whether it is private rooftop solar, energy storage, electric vehicles, or energy management tools at homes and businesses, we all want more. We’re proposing to install technologies that will help integrate and increase these choices to create cleaner air, healthier communities, and to further position San Diego and south Orange Counties as America’s leader in renewable energy and clean transportation, including:
- Installing software to integrate more resources like private solar, energy storage and electric vehicles; and,
- Investing in power grid sensing technologies to help address voltage fluctuations associated with integrating increased amounts of private solar, energy storage, electric vehicles, and demand response programs.
Frequently Asked Questions
Rates are determined through a formal proceeding called a general rate case, which is a public process led by the California Public Utilities Commission to determine energy rates and what customers pay. The Commission will review and authorize how much SDG&E will be able to collect for years 2019-2021 (or 2019-2022) to continue to provide affordable, safe, reliable and clean energy service.
This rate request does not include the cost of purchasing the energy used every day by customers, which is passed through directly without any mark-up.
Until the CPUC issues a final decision, which will set the revenue SDG&E is allowed to collect, the customer bill impact is unknown. It is anticipated that a final decision will be issued in 30 to 60 days with any changes to pricing taking effect toward the end of the year.
This is the company’s first “risk-informed” rate request, providing additional information on investments and projects that prioritize the mitigation of top safety risks.
Assessing risk is not new. The company continually evaluates risk and develops action plans that consider long-term ways in which to deliver clean, safe and reliable service while adapting to changing conditions.
What is new for this proposal is a formal discussion of top risks (which were highlighted and considered in the risk assessment phase that preceded this rate request) and the funding proposals intended to address those risks. This “risk-informed” presentation promotes a new way of thinking about how risks are identified, evaluated, prioritized, and mitigated.
Close to half of the total requested increase is attributed to improvements identified in SDG&E’s assessment of top safety risks.
Shutting off power as a safety precaution is a last resort when conditions threaten our system. We are making investments in an effort to isolate and minimize the impact of these precautionary measures to the fewest number of customers.
In California, electricity prices are determined by a variety of factors, including how much electricity is being used by homes and businesses; the number and type of customers in a given service area; where the electricity comes from and how it is generated; and the cost to deliver that electricity to every home and business regardless of location.
Comparing SDG&E’s rates to other utilities is not an apples-to-apples comparison. For example, SDG&E also has a much smaller customer base overall than the utilities to the north. Given there are fixed costs - infrastructure such as power poles and pipelines to serve reliable and safe electric and gas – there are less customers in SDG&E’s service area to cover those costs, making the price per kw/h higher than other utilities.
There are quite a few policy mandates that are driving up costs—such as the self-generation incentive program. Absorbing these increased costs is tough given the number of customers we serve.