Wiktor Wise
San Diego Gas & Electric (SDG&E) has been criticized for its high electricity delivery rates, with some calling for the company to be replaced by a public utility. SDG&E's rates are regulated by a governing board appointed by the governor, and the company has been accused of prioritizing profit over consumer affordability. Various factors affect energy bills, including usage, time of year, infrastructure projects, and state-mandated programs. While SDG&E claims that delivery charges are lower than in 2023, customers continue to question the accuracy of their bills. San Diego has the most expensive electricity in the country, and the transition to electric technologies and vehicles is expected to further impact energy costs.
| Characteristics | Values |
|---|---|
| Monopoly | SDG&E is a for-profit monopoly |
| Profit | SDG&E is making record profits year after year |
| Infrastructure projects | SDG&E spends on projects like microgrids, transmission lines, urban undergrounding, and EV infrastructure |
| Clean energy | SDG&E is transitioning to clean energy, which is costly |
| Base Services Charge | Starting October 2025, a new line item called the Base Services Charge will appear on bills, costing most customers approximately $24 per month |
| Demand | New demand from electrifying vehicles and buildings is increasing |
| Tiered billing | Tiered billing structure results in higher costs as usage increases |
| Time of year | Delivery rates are higher in the winter |
| Customer usage | The more electricity a customer uses, the more they pay for delivery |
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What You'll Learn
SDGE is a for-profit monopoly, so prices are high
San Diego Gas & Electric (SDG&E) is a for-profit monopoly that delivers electricity to the region. SDG&E's rates are high compared to other providers, and this has drawn national attention. As a for-profit entity, SDG&E has been criticised for putting profits ahead of consumers. The company has been accused of spending a lot of money on advocacy and lobbying efforts to increase profits, and its infrastructure projects, such as developing microgrids and transmission lines, have been cited as profit drivers.
The high rates charged by SDG&E are a significant concern for consumers, with some questioning the accuracy of their bills and the high delivery charges. These delivery charges are costs associated with operating and maintaining the equipment needed to deliver electricity, including customer service, technicians, meters, and other equipment. While SDG&E claims that these charges are lower than in the previous year, consumers continue to express concern and frustration.
The for-profit nature of SDG&E has led to calls for alternative solutions, such as a public-owned utility. Community Choice Aggregation (CCA) is one such option, where electricity is bought by a separate entity but delivered by SDG&E. However, even with this option, consumers have reported higher delivery charges.
The high costs of electricity in San Diego have prompted discussions about the role of for-profit corporations in the energy sector. Some argue that a utility run as a non-profit would be more affordable for consumers. Additionally, there are efforts to remove SDG&E and establish a publicly owned utility, with groups like Power San Diego collecting signatures to bring about this change.
The combination of SDG&E's for-profit monopoly status and the high prices it charges for electricity delivery has led to widespread discussion and efforts to explore alternative solutions that could potentially provide more affordable energy options for the community.
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The cost of delivering electricity is more than the cost of generating it
SDG&E is a for-profit monopoly that has been criticized for continuously increasing its fees and rates. Some of the reasons for the high delivery charges include infrastructure projects, such as developing microgrids and transmission lines, and the transition to clean energy. While there are legitimate reasons for price increases, some customers question the necessity of the infrastructure used to deliver electricity, believing that it contributes to the high costs.
The cost of delivering electricity is influenced by factors beyond the initial generation of power. The transmission and distribution of electricity across vast distances require an extensive network of infrastructure, maintenance, and personnel, all of which contribute to the overall delivery cost. Additionally, the transition to clean energy sources and the pursuit of renewable energy goals can also impact delivery rates, as seen with SDG&E.
It is worth noting that the cost of delivering electricity is not solely determined by the distance it travels but also by the efficiency of the transmission and distribution systems. Advancements in technology have allowed for remote fault repair, meter reading, and improved communication with customers, which can help optimize delivery processes and potentially reduce costs over time.
In summary, the cost of delivering electricity exceeds the cost of generation due to various factors, including infrastructure maintenance, technology upgrades, and the pursuit of renewable energy goals. While SDG&E has faced criticism for its high delivery charges, there are ongoing efforts to transition to clean energy alternatives and address consumer concerns about rising electricity costs.
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SDGE's infrastructure projects are expensive
San Diego Gas & Electric (SDG&E) has some of the highest electricity rates in the country. While there are many reasons for this, one significant factor is the cost of infrastructure projects.
SDG&E's infrastructure projects are expensive due to several factors. Firstly, the company is investing in various projects to upgrade and maintain its energy delivery systems. This includes projects like developing microgrids, transmission lines, urban undergrounding, and EV infrastructure. These projects are necessary to ensure reliable and sustainable electricity delivery to its customers. However, they can also be costly, especially when they involve major construction and upgrades. For example, the Sunrise Powerlink project, which brought solar power from Imperial County to San Diego, was an enormously expensive endeavour that was funded by SDG&E customers.
Secondly, SDG&E's infrastructure projects must align with the state's renewable energy goals and climate change initiatives. California has set ambitious targets for renewable energy, such as SB100, which requires that 100% of retail electricity sales be from renewable and zero-carbon sources by 2045. To meet these goals, SDG&E is transitioning to cleaner energy sources and investing in infrastructure that supports electric vehicles and energy efficiency. While these efforts are important for the environment, they can also contribute to higher costs for consumers.
Additionally, the cost of delivering electricity can vary depending on factors such as the time of year and individual usage. During the winter, delivery charges are typically higher due to increased energy usage for heating and lighting. Similarly, customers who use more electricity will generally pay more for delivery, as the costs of operating and maintaining the energy delivery systems are distributed across customers based on their usage.
Moreover, SDG&E's infrastructure projects also encompass the costs of customer service, service technicians, meters, and other equipment necessary to operate the utility effectively. These costs are reflected in the delivery charges on customers' bills and can contribute to the overall expense of the projects.
It's worth noting that while SDG&E's infrastructure projects are costly, the company does not profit from certain charges on customers' bills, such as taxes, fees, and public purpose programs. These charges are mandated by the state and are not a source of profit for the company. However, the overall impact of SDG&E's infrastructure projects on consumers is significant, leading to higher electricity rates and drawing attention from across the nation.
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SDGE's clean energy transition is costly
San Diego Gas & Electric (SDG&E) has some of the highest electricity rates in the country, and the transition to clean energy is one of the reasons for this.
SDG&E is a for-profit monopoly, and as such, it has been argued that they are incentivized to increase their rates and profits. The transition to clean energy is costly, and while the company does not profit from certain state-mandated fees and taxes, the cost of operating energy systems, infrastructure projects, and maintenance falls on the consumer. These costs include construction, modernization, and upkeep of equipment such as pipes, wires, and substations, as well as customer service and technician expenses.
The Base Services Charge, which will be implemented in October 2025, is another factor in the high costs. This charge is related to the operation and maintenance of the equipment needed to deliver electricity, and it will be a separate line item on customers' bills. While this change is intended to make billing more transparent, it will also result in higher costs for some customers.
Additionally, the cost of generating electricity from clean sources can be higher than that of traditional energy sources. The price of natural gas, for example, can vary based on supply and demand, while the cost of generating electricity from solar power may be offset by projects such as the Sunrise Powerlink, which was an expensive undertaking paid for by SDG&E customers.
The transition to clean energy also requires significant investments in infrastructure projects, such as developing microgrids, transmission lines, and EV infrastructure. These projects must align with the state's renewable energy goals and are approved through the California Public Utilities Commission (CPUC). While these projects are necessary for the transition to clean energy, they contribute to the overall increase in electricity rates.
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SDGE's billing structure is not transparent
San Diego Gas & Electric (SDG&E) has been criticised for its high delivery rates, with some calling for the company to be replaced by a public utility. While SDG&E has stated that its rates are accurate and transparent, there are several factors that contribute to the high cost of electric delivery. Firstly, SDG&E is a for-profit monopoly, which means that it has the ability to increase prices without much competition. Additionally, the company engages in significant advocacy and lobbying efforts to increase its profits.
While SDG&E claims that its delivery rates are 11% lower than in 2023, customers have reported that their bills are still significantly higher than expected. One customer, Laws, reported that the distribution charge on her bill was five times the amount of her actual kilowatt usage. This discrepancy has led to questions about the transparency of SDG&E's billing structure.
The high cost of electric delivery is also attributed to the infrastructure projects that SDG&E undertakes. These projects, such as developing microgrids, transmission lines, and urban undergrounding, can drive up the cost of delivering electricity to customers. Additionally, the time of year can affect delivery rates, with winter rates being higher than summer rates due to increased electricity usage during colder months.
Another factor that impacts the cost of electric delivery is the suite of tools and services that SDG&E offers to its customers. These include customer service, service technicians, meters, and other equipment needed to operate the utility. While some of these costs are necessary, customers have questioned whether all of them are essential, especially when compared to the costs of electricity generation.
To address concerns about billing transparency, the California Legislature passed Assembly Bill (AB) 205 in June 2022. This bill mandates that the California Public Utilities Commission (CPUC) change the way residential customers' electric bills are structured, with the goal of making bills more transparent and affordable for electric technologies. The bill will take effect for SDG&E customers in October 2025, and it remains to be seen what impact it will have on the transparency and affordability of electric delivery rates.
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Frequently asked questions
SDGE electric delivery rates are high because of the costs of operating energy systems, construction, modernisation, upkeep of equipment, and customer service. The more electricity you use, the more you pay for delivery. Delivery rates also vary between winter and summer, with higher charges in the winter.
The amount of electricity you use is the main factor affecting the cost of your bill. Using more appliances during colder weather will increase your bill. Some appliances, like electric heaters, use a lot of energy. Water heaters also work longer and harder to heat up colder water. Having guests, cooking at home more, using more lights and leaving appliances on can all impact your bill.
During the winter, which runs from 1 November to 31 May, delivery charges are about 13 cents more. From 1 June, you can expect those delivery charges to go down.
The Base Services Charge is a new line item on your bill, effective from October 2025. It is a reallocation of costs, and SDG&E will not earn more profit from this change. Most customers will pay approximately $24 per month, while customers enrolled in low-income programs will pay a discounted charge.
