SDG&E Wants 8.6% Rate Increase; Consumer Advocates and City Council Scramble to Oppose It

San Diego Gas & Electric has just formally requested an 8.6% rate increase with the California Public Utilities Commission. SDG&E wants it to begin in 2028.

The utility seeks approximately $3.8 billion for 2028, including about $2.9 billion for electric operations and $900 million for natural gas service. If the CPUC approves their request, “SDG&E estimates the increase would add roughly $14.03 per month to the average residential electric bill and $8.45 per month to the average residential gas bill compared to 2027 rates,” reports CBS8. That’s a combined $22.48 to the average monthly bill, reports the OB Rag.

The filing by San Diego’s for-profit utility, launches “what is expected to be an 18-month review process before state regulators determine whether to approve, modify or reject the proposal,” says CBS8/

Meanwhile, the San Diego City Council on Tuesday, June 16th, voted to endorse 10 bills in the state legislature aimed at lowering electricity rates and making investor-owned utilities more accountable to ratepayers, reports KPBS.

Some of the bills include changes to the California Public Utilities Commission, which regulates investor-owned utilities, directing the agency to put greater scrutiny on requests to increase rates.

One bill, SB 905, seeks to limit the profits that investor-owned utilities make on wildfire mitigation. The bill would also tie executive pay to lowering rates and expand lower-cost public financing for energy infrastructure projects.

Council President Joe LaCava explained the vote; he said that as the second-largest city in California, San Diego was sending a message to state lawmakers that they need to prioritize energy affordability. “We are calling on Sacramento to take action to hold investor-owned utilities accountable, unlock clean energy savings for residents and end the cycle of infrastructure buildup on the backs of ratepayers,” he said.

LaCava spoke at a press conference outside city hall on Tuesday to highlight the council vote, standing in front of a number of environmental activists.

KPBS reports that, “As the bills await final approval in Sacramento, San Diego is continuing its exploration of forming a public utility. The council is set to discuss a “phase II” public power feasibility study next week.”

The study seeks to take inventory of all the infrastructure San Diego would be required to purchase from SDG&E in order to form a municipal energy utility. An earlier feasibility study in 2023 found a public utility could offer lower rates than SDG&E, though the utility disputed the study’s methodology and assumptions.

Now, don’t forget that SDG&E really knows your pain. In a statement, SDG&E acknowledged the impact higher bills can have on customers.

“We understand that any increase in energy bills can be challenging for our customers, especially as many household costs continue to rise,” SDG&E spokesperson Antony Wagner said. “SDG&E’s 2028 rate request reflects a focused plan to manage costs responsibly while maintaining safe and reliable service.”

The company said part of the proposed increase is driven by rising costs outside its direct control, including insurance, health care and cybersecurity expenses. SDG&E also said the filing reflects efforts to improve efficiency, streamline operations and make targeted investments in infrastructure and systems customers rely on daily.

Besides the city council, other consumer advocates are preparing to challenge the proposal. Ed Lopez, executive director of the Utility Consumers Action Network (UCAN), said the organization plans to formally oppose the filing.

“UCAN will be filing a protest along with many other interveners,” Lopez said. Lopez argued that utility costs have risen too sharply in recent years, noting that average SDG&E rates have nearly doubled over the past decade. “It is getting out of hand,” he told CBS 8.

UCAN also plans to scrutinize the utility’s proposed spending on infrastructure projects. “This is adding to the burden, this is adding to the profitability SDG&E gets, and yet this is found to be reasonable and acceptable by the Commission. Enough is enough,” Lopez said. He also urged state regulators to take a harder look at the proposal before approving any increase.

“The Commission itself just needs to do its basic job. Think about Californians, think about the customers and consumers first,” Lopez said.

SDG&E maintains it is working to control costs. In its filing, the utility said it has adopted a “disciplined approach” focused on improving efficiency and limiting expenditures to essential work. As one example, the company said it has reduced the cost of undergrounding power lines in high-risk wildfire areas from approximately $6 million per mile to about $3 million per mile.

With the filing now before the California Public Utilities Commission, UCAN and other intervening parties have 30 days to submit formal responses. The commission’s review process will include testimony, analysis and hearings before the five-member panel ultimately votes on the request, a decision that is not expected until sometime in late 2027.

CBS8