Typical San Diego Gas & Electric residential customers will pay about $3 more on average on their electricity bills in the new year and about $1 more if their homes have natural gas hookups.

For 2026, the system-wide average for the electricity delivery rate in SDG&E’s service territory is estimated to increase from 21 cents per kilowatt-hour to 22 cents for residential customers who are not on bill-assistance programs.

For typical customers who use 400 kilowatt-hours in a given month, that would translate to the average delivery charge rising from $133 per month to $136.

For typical customers using natural gas, the 2026 bill for customers using 33 therms in winter would see their average gas bill rise from about $90 per month to $91. A therm refers to one unit of natural gas.

SDG&E officials say the uptick in the natural gas bill is mostly because of pipeline safety upgrades and program costs mandated by the state.

The predicted $3-per-month increase in electricity delivery, the utility says, is driven by a combination of factors — such as upgrades to the grid, which include building new substations and upgrading and adding circuits.

The proposed increases come at a time when complaints about high utility bills in the San Diego area — and throughout California — grow louder.

With the exception of Hawaii, the average retail price per kilowatt-hour in the Golden State was the highest in the country in 2024, according to the U.S. Energy Information Administration. And in a 2023 blog post by the Haas Energy Institute at UC Berkeley, SDG&E had the highest electricity rate in California.

“We definitely understand that people are struggling right now as the cost of goods and services continue to go up across the board,” said Adam Pierce, SDG&E vice president of energy procurement and rates. “That’s why it’s so important for us to continue to work hard and help stabilize bills and make sure customers are aware of the support that they have available to them.”

The proposed increases would also affect customers enrolled in the two community choice aggregation, or CCA, programs in the San Diego area — San Diego Community Power and the Clean Energy Alliance.

As per state rules, CCAs purchase electricity generation for customers in their respective municipalities. But legacy utilities such as SDG&E are still responsible for the costs associated with the transmission, distribution and delivery of the power across the service territory.

But wait, there’s more

Rate impacts on bills are always a bit of a moving target and in addition to the proposed 2026 increases, there are also a number of looming regulatory items that may affect residential electric bills this year.

First, there’s a separate proceeding before the California Public Utilities Commission related to the costs of reducing the risk of wildfires that were racked up in SDG&E’s service territory from 2019 through 2022.

A proposed decision currently in front of the CPUC’s five voting members does not give SDG&E as much as the utility had asked. Nonetheless, if approved, average residential bills would go up by about $5 per month.

The vote on SDG&E’s Wildfire Mitigation Plan may come as early as Thursday. The CPUC commissioners are free to approve, reject or make changes to the figures.

Second, in a separate item, a reduction of about $3 per month on bills is expected to come in August 2026.

It’s a bit complicated, but the CPUC approved SDG&E’s general rate case one year ago.

Essentially a budget outline, a general rate case estimates what the commission thinks it will cost to maintain and upgrade the power system for each investor-owned utility in California over a four-year period.

On a 4-0 vote in December 2024, the CPUC approved a rate increase of 2.6% for electricity and 1.8% for natural gas for 2024 through 2027.

But the commission did not approve the decision until 2024 was almost over. As a result, the rate increases had to be amortized into customer bills for 18 months starting in 2025 to make up for what was not collected.

That 18-month period of higher amortized costs will end by the middle of 2026, which means an estimated reduction in average residential SDG&E bills of about $3 per month starting around August.

Third, the CPUC is poised to vote on what’s called a “cost of capital” proceeding that deals with the returns on debt and equity that investor-owned utilities make. If the commission approves the proposed decision before it, average residential bills for SDG&E this year could be reduced by about 50 cents a month.

And fourth, SDG&E is lobbying state officials speed up the return of about $100 million of unspent money from a statewide program called CalSHAPE.

Administered by the California Energy Commission, CalSHAPE provided funding to upgrade heating, air conditioning and ventilation systems in K-12 schools and replace plumbing and appliances that failed to meet water efficiency standards.

The energy commission expects to deliver the unspent funds by the end of 2026, SDG&E officials said, but the utility wants the money sooner. SDG&E estimates the $100 million would reduce residential bills by around $2 a month.

SDG&E hears it from the City Council

SDG&E officials went before the San Diego City Council on Monday afternoon as part of the utility’s quarterly public meetings with the city.

Many of the remarks from the council members, as well as those speaking during public comment, focused on the effect of SDG&E’s high rates on customers and the company’s profit margins.

SDG&E earned a $891 million in 2024, according to filings submitted to the U.S. Securities and Exchange Commission in the first quarter of 2025 by Sempra, SDG&E’s parent company.

District 5 Councilmember Marni von Wilpert alluded to Sempra CEO Jeff Martin’s pay package.

“He makes 20-something million a year so you can’t come here and tell us you’re not capitalized, when most of this money is being sucked up into the pay and benefits for these energy executives,” von Wilpert said.

According to Sempra’s 2024 Proxy Statement, Martin’s base pay was $1.5 million per year. In 2023, Martin’s total direct compensation package, which included salary, stock, options and bonuses tied to company performance, came to $18.2 million.

Council President Joe LaCava of District 1 referenced a 2023 report from the California state auditor that said while SDG&E had done nothing illegal, improper or unethical, the utility had exceeded the rate of return — or profit — that was authorized by the CPUC nine times in one 10-year stretch.

“There is a conversation the city should pursue about maybe some of that should flow back to the ratepayers, as opposed to rewarding shareholders and investors going forward,” LaCava said.

Brittany Applestein Syz, vice president of external affairs and communications, said SDG&E has spent shareholder dollars on various programs to help customers grappling with bills, including “about $13 million over the last three to four years” in its Neighbor-to-Neighbor program.

“We know that across the country people are struggling with bills across the board, everything from food, gasoline, utility bills, water, electricity …. we do have a ton of different programs to help support our customers,” Applestein Syz said earlier in the meeting.

In an annual review of the number of SDG&E customers who are behind on their bills, the Union-Tribune found that as of the end of January 2025, 23.6% of residential accounts were at least one month in arrears.

That represented a drop of 2.9% compared to the year before but 173,422 residential accounts were four months or more behind.

“As (SDG&E) profits continue to grow, we continue to struggle,” said Barbara Pinto, a 79-year-old San Diego resident and member of Alliance of Californians for Community Empowerment (ACCE) Action.

SDG&E provides energy service to 3.7 million customers through 1.49 million electric meters and 905,00 natural gas meters across San Diego County and the southern portion of Orange County.