San Diego Faces Choice as SDG&E Seeks 8.6% Rate Hike and City Study Finds Public Power Feasible

Overview

• SDG&E has opened a new general rate case asking for an estimated $3.8 billion in 2028 revenue and an overall 8.6% rate increase that would raise a typical residential electricity bill by about $14 and gas by about $8 per month if approved.
• The San Diego City Council unanimously voted to back a 10‑bill Sacramento package that targets affordability, transparency, and alignment of utility investments with greenhouse‑gas goals.
• A city‑commissioned Phase Two study presented to the council finds municipalization technically and economically feasible but says it would require large up‑front costs — a $612 million separation charge, about $300 million in startup costs, $2.4 billion to $7.6 billion for grid assets, and total transition scenarios that can top $8 billion — and take roughly 10 to 15 years to complete.
• SDG&E and some labor and business groups dispute the city study, arguing it understates costs, omits safety and reliability risks, and uses assumptions that differ from past utility valuations and regulator methods.
• The CPUC rate review, further technical work by the city, and political and legal fights over asset valuation, rate growth and safety will determine whether San Diego accepts SDG&E’s higher rates, pursues public power, or seeks other policy fixes that affect household bills and local control.