In a rare split decision, the California Public Utilities Commission has approved $51.2 million in extra money for electrification projects for San Diego Gas & Electric customers to help the state reach its carbon neutrality goal.
Under the decision (25-04-015), SDG&E will create a new electric energization memorandum account (EEMA) for projects that will be completed outside the utility’s approved 2024 general rate case (GRC).
SDG&E originally requested about $310 million for EEMA projects between 2024 and 2026, but the CPUC at its Oct. 30 voting meeting reduced the request by 83%, saying the utility already has other methods for recovering electrification project costs.
“By most measures, SDG&E has been meeting commission goals for interconnection,” CPUC Commissioner Matthew Baker said at the voting meeting. “This proceeding is the result of state legislation stemming from concerns that some utilities have been unable to keep up with requests to connect to the grid.”
Energization projects include those that connect new customers to the distribution grid and those that upgrade distribution or transmission capacity and infrastructure for new and existing customers.
The decision is part of Senate Bill 410, signed by Gov. Gavin Newsom in 2023, which requires the CPUC to ensure that electric utilities can recover energization project costs in a timely and complete manner. Part of the bill intends to increase the speed of energization and service upgrade projects.
About $13.4 million of SDG&E’s EEMA budget will be for projects that increase capacity of existing customers; about $27.3 million will be for projects for new customers; and about $10.5 million will be for materials, such as transformers.
Commissioner Darcie Houck voted against the decision, saying it “should not include backward-looking caps for 2024 costs that have already been incurred.”
“SB 410 requires the commission to establish annual cost caps, which can be reasonably interpreted to mean cost caps set in advance of the utility incurring those costs,” Houck said at the meeting.
CPUC President Alice Reynolds replied that she found Houck’s comments “hard to follow.”
“I might have misheard, but I think there were a few inaccuracies, so I’m just gonna try to be really clear,” President Reynolds said. “The energization cost caps here are really designed to accelerate energization while also staying grounded in our statutory direction.”
Commissioner John Reynolds added that the amount of new ratemaking structures outside general rate cases has made it “harder for us to take [a] holistic view and harder for the public to have a clear picture of rate impacts.”
“It also means that rates change more often and we’ve heard complaints about this from members of the public,” he said. “On the other hand, GRCs only occur every four years and technology changes on shorter timescales.”
In comments noted in the decision, The Utility Reform Network (TURN) said SDG&E has not demonstrated any need for more money over the amounts it received in its GRC to meet customer energization demands.
TURN said that in March, “SDG&E stated that it considered it an ‘unlikely event’ that the utility would be ‘unable to accommodate the full load amount requested by the customer because of an upstream capacity constraint.’”
SDG&E said it will use the money it seeks in this application to improve its performance for additional types of energization projects, such as extending lines to new developments and electric vehicle charging infrastructure, the decision says.
