SDG&E Rate Hike 2019 Simplified

San Diego has some of the most expensive electricity prices in the nation, and they’re only going to get higher. Recently, SDG&E has requested rate increases, by a large amount over the next four years. With this request, SDG&E is set to continue their legacy of charging some of the highest prices for electricity in the US. So, how much are SDG&E’s Rates expected to go up in 2019 according to their request? In 2019, SDG&E’s rate is set to increase 11%. Then in 2020, there is another 6.9% increase requested, followed by an additional 5.1% in 2021, and then 4.9% in 2022. Due to compounding, this is a total of 31% over the next four years. That’s a huge increase – almost by one-third, and SDG&E estimates that just the 11% increase will increase the average monthly bill by around $13.99 a month or an additional $168 per year!Passing Costs Down To Customers The California Public Utilities Commission received the rate hike request on April 22. The reason for the increase, SDG&E has stated, is to account for the increased liabilities they have due to wildfire risks. Due to this, the utility has stated they need the rate hike to increase their return on capital 10.03% and return on equity to 14.3% so that they can continue to attract investors and can keep building out a reliable grid. Unlike California’s many municipal utilities, which operate as non-profit government entities, SDG&E is owned by a Fortune 500 company, Sempra Energy, and argues that charges to customers must not only equal expenses but must also provide dividends to their shareholders. Therefore, as their liabilities increase with increased fire risk in the area, they are moving to pass along these additional costs to their customers in order to stay profitable. Take Control of Your Power With Solar However, unlike other investor-owned public companies doing business in California, SDG&E and similar investor-owned utilities like PG&E or Southern California Edison don’t have any competitors to help them hold down expenses and increase their efficiency; they operate essentially as a profit-making monopoly, delivering a service that homeowners have to have. If you use electricity and you live in San Diego, what other option do you have besides to buy from SDG&E? Well, there is one other option, and it’s called going solar. If you install a solar energy system on your roof or property, you can take your power into your own hands. While you will still rely on SDG&E for grid connection, you will no longer have to buy power from them at their increasingly expensive rates.Why Installing Now is Better Than Ever Luckily for homeowners in San Diego who want to install solar to avoid these electric rate increases, the 30% Federal Solar Tax Credit is still around for the rest of 2019, making solar cheaper than ever, but only for the rest of the year. For those that don’t know, the Federal Solar Tax Credit is an income tax credit for 30% of the cost of your solar system, as long as you purchase the system and it isn’t a lease. So if your system costs $20,000, you will receive an income Tax Credit of $6,000. After 2019, the Federal Solar Tax Credit is being phased out over a 4 year period, down to 26% in 2020, 22% in 2021, and then is applicable only to businesses, and is only 10% from 2020 onward. In a city like San Diego where you only have one utility, and you can’t choose your power source, solar provides an alternative to the monopolistic utility. To go solar is to assert your free-market choice, and to free yourself from the ridiculous rate increases SDG&E implements to appease their shareholders and attract investors. So if you install solar this year, assuming you will owe on your Federal income taxes, your solar will be cheaper than any years in the future. And the sooner you install solar, the sooner you can start harvesting your own power from the sun, and the sooner you will no longer be subject to the rate increases like the ones proposed over the next four years  

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