Just as San Diego Gas & Electric is asking state regulators to make way for increased utility rates in the coming years, the San Diego City Council is throwing its support behind state legislation aimed, in part, at reducing energy costs.
The City Council has unanimously voted to support the 10-bill package working its way through Sacramento.A day earlier, SDG&E opened an every-four-year process with the California Public Utilities Commission that essentially determines the cost of operating a utility system and how to allocate the costs of doing so.
The multi-year process, known as a general rate case, could determine ratepayers costs between 2028 and 2031.
If approved, SDG&E’s initial proposal would translate in 2028 to a monthly increase for a typical residential customer of $14.03 for electricity and $8.45 for natural gas, good for an overall 8.6% increase.
“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 Anthony Wagner said in a statement. “SDG&E’s 2028 rate request reflects a focused plan to manage costs responsibly while maintaining safe and reliable service.”
In its initial filing, SDG&E requested an estimated $3.8 billion revenue requirement for 2028 — based on its estimate for core operations, infrastructure improvements related to safety and reliability, cybersecurity and upgrades to technology.
“The CPUC ensures that these requests are thoroughly reviewed, justified and in the public interest, and we do so through an open and transparent process in which the voice of the consumer is very necessary and solicited,” CPUC executive director Leuwam Tesfai argued in an article about the process.
SDG&E last filed a general rate case on May 16, 2022, which was approved by the CPUC on Dec. 19, 2024. The decision authorized revenue requirements for 2024 to 2027.
The commission adopted a Test Year 2024 base revenue requirement of $2.699 billion and an annual 3% post-test year base revenue increase, according to the CPUC.
Councilman Sean Elo-Rivera, chair of the council’s Environment Committee, said the city, with few options to limit utility cost increases on its own, was obligated to support state efforts.
“When a company is not willing to restrain itself, I think government has not just a right but a responsibility to step in,” he said at the committee meeting before the council’s vote.
The legislative package includes SB 913, which would address affordability by utilizing existing resources instead of buying expensive new infrastructure. But it also includes SB 1359, a climate-focused bill that would require the CPUC to make sure that the capital investments made by gas corporations are consistent with greenhouse gas emission reduction targets.
It also aims to make the CPUC more transparent through AB 2463 and aims to establish the California Grid Manufacturing Initiative, which would centralize demand for critical electricity grid components through AB 2516.
Rising utility costs amid a regional affordability crisis received the most attention during the council’s vote to back the package.
“The facts are that an enormous amount of money is being made off San Diegans,” Elo-Rivera said, “and it’s difficult to square the commitment to affordability with the profits that SDG&E is enjoying.”
A March report by the California Public Advocates Office found about one in five SDG&E customers are behind on their energy bills. SDG&E earned $563 million in profits last year, according to the annual 10-K report for Sempra, the utility’s parent company.
In a statement, the utility argued the legislative package is a distraction from what is causing utility rates to increase.
“The most effective path to lower bills is addressing underlying cost drivers — not one size fits all mandates that may not deliver real or immediate savings for customers,” the statement read. “SDG&E is focused on solutions that provide near term bill relief, including reducing operating costs, removing non-essential charges from bills and working with legislators to advance policies that improve affordability over time.”
SDG&E customers currently pay $0.457 per kWh in electricity rates — or over double the national average of $0.196 per kWh. It had the second highest residential average rates out of the 200 investor-owned utilities in the country in 2023, according to the CPUC.
The California Legislative Analyst’s Office, in a 2025 report, said key factors contributing to high utility costs include wildfire-related costs and greenhouse gas reduction programs.
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