San Diego Gas & Electric customers will save a few bucks on their monthly bills for the rest of this year, offering a rare bit of relief for ratepayers in a region that has seen some of the highest electricity costs in the nation. The reductions, which began in the June billing cycle, come from a combination of expiring rate adjustments and newly timed state climate credits.
According to the San Diego Union-Tribune, residential customers who receive their electricity generation from one of the two community choice energy programs in the area, San Diego Community Power or the Clean Energy Alliance, can expect to see about a $6 reduction in their electricity bills. About 85% of residential customers in SDG&E’s service territory are enrolled in one of these programs.
For the remaining “bundled” customers who get all of their utility services from SDG&E, the savings amount to approximately $3 per month. The reductions started in the June billing cycle and run through the rest of 2026, with the next change in electricity rates anticipated in January 2027.
The decreases result from a combination of items that have fallen off bills, according to SDG&E spokesperson Anthony Wagner. One key factor relates to a ruling by the California Public Utilities Commission in December 2024. At that time, the CPUC approved SDG&E’s general rate case, resulting in increases of 2.6% for electricity and 1.8% for natural gas for 2024 through 2027.
However, the commission did not approve the decision until 2024 was nearly 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 during the delay. That 18-month stretch came to an end in the middle of this year, directly contributing to the current decreases.
In addition to the rate adjustment expiration, San Diego ratepayers will soon receive back-to-back discounts through the California Climate Credit. Funded through the state’s Cap-and-Invest Program, which requires power plants, natural gas providers, and large industries that emit greenhouse gases to buy permits on the carbon pollution they produce, the credit is distributed to all customers of investor-owned utilities, including SDG&E.
This year, SDG&E customers will receive a credit of $49.36 in August on their electric bills, plus another $49.36 credit in September. The timing shift was a deliberate decision by the CPUC, which moved the credits to August and September since those are typically the hottest months of the year when energy usage and bills peak. Previously, the electricity portion of the credit was distributed during one month in the spring and one month in the fall.
“These credits provide timely relief,” SDG&E chief customer officer Dana Golan said in a statement, “helping offset costs during a period when energy use and bills can be higher.” Customers do not need to sign up to receive the credits, as they are automatically deducted from monthly statements.
The relief is significant in the context of San Diego’s broader energy cost trajectory. According to the most recent electric rates report by the California Public Advocates Office, the average per-kilowatt residential rate has increased 98% in SDG&E’s service territory in the past 10 years. Southern California Edison customers have seen a 101% increase over the same time frame, while Pacific Gas & Electric’s average residential rates have climbed 69%.
The doubling of rates over a decade has made San Diego County’s electricity costs among the highest in the nation, placing particular strain on low-income households and fixed-income retirees. The current reductions, while welcomed, represent only modest relief against a long-term trend of escalating utility costs.
The dollar amounts of the California Climate Credits fluctuate each year, depending on how much money the Cap-and-Invest Program generates. The program is part of California’s broader climate policy framework, which uses market-based mechanisms to reduce greenhouse gas emissions while returning some of the revenue to consumers. The shift to August and September credits reflects an effort to make the program more responsive to the actual usage patterns of ratepayers.
For the San Diego business community, the rate reductions come at a useful time. Businesses, particularly those in energy-intensive sectors such as manufacturing, biotechnology, and data centers, have been vocal about the impact of rising electricity costs on their competitiveness. Lower rates, even temporarily, could provide some breathing room for businesses dealing with multiple economic pressures, including inflation and workforce costs.
The community choice energy programs, San Diego Community Power and the Clean Energy Alliance, which serve the majority of SDG&E customers, represent a significant shift in how electricity is procured in the region. These programs purchase power on behalf of their customers while SDG&E continues to handle transmission, distribution, and billing. The model has been credited with increasing renewable energy procurement and providing competitive rates, though it has also added complexity to the billing landscape for consumers.
As SDG&E customers enjoy the temporary relief, the broader debate over California’s energy costs continues. With rates having doubled in a decade and the state pursuing aggressive climate goals that require significant infrastructure investment, the tension between environmental objectives and affordability remains one of the most pressing policy challenges for regulators, utilities, and ratepayers alike.
