Barrio Logan NASSCO
Power lines along an alley in the Barrio Logan neighborhood on Nov. 2, 2021. / Photo by Adriana Heldiz

No matter which way you slice it, San Diego has the most expensive electricity in the country. 

And it’s beginning to draw eyes from across the nation. 

Duncan Campbell, who works for a microgrid company based in New York, tweeted out findings from a database he created with energy price information from the U.S. Energy Information Administration.  

“SDG&E residential and commercial delivery rates are the absolute highest in the country and have 20-year (compound annual growth rate) well in excess of inflation!” Campbell tweeted Aug. 6. 

Campbell went on to explain what he saw happening to the cost of transporting energy in San Diego. It was compelling, apparently. U.S. Rep. Scott Peters, who represents San Diego in the state’s 52nd district, retweeted Campbell adding, “This helped me. Recommend.”  

That’s only part of the equation. Over 80 percent of San Diegans pay a public power company for the actual molecules of energy they consume. Those prices are also sky high. 

A few basic elements about San Diego make its energy so expensive. San Diego’s electric service area is kind of an island in California, occupying just San Diego County. California’s other investor-owned utilities, Southern California Edison and Pacific Gas and Electric, serve large swaths of the state while SDG&E spreads costs to a smaller population.  

Another factor: California solar adoption is highest in San Diego County. People who own rooftop solar generally pay less toward maintaining the energy grid, further reducing the pool from which utilities recoup costs. (How to account for rooftop solar adoption is an ongoing political debate in California’s renewable energy space.)  

SDG&E is selling less energy while spending more building and protecting infrastructure to transport it. Ratepayers are also footing the bill for lower-income San Diegans who can’t afford to pay, as well as tearing down a nuclear power plant, burying powerlines underground and fees to leave SDG&E for a public power company.

Read about everything you ever wanted to know about your energy bill here.  

Still, the cost of the energy itself at SDG&E rose substantially since 2018. The average summer cost of energy jumped by 67 percent and 80 percent in winter between Jan. 1, 2018, and Jan. 1, 2023, according to electric energy commodity costs reported in rate filings. Electricity is substantially cheaper in wintertime, however, currently averaging 12 cents per kilowatt hour in winter versus 30 cents in summer across all times of the day. (SDG&E isn’t permitted to make money off the buying and selling of the energy itself, however.)

Getting Energy to San Diego Is Expensive 

SDG&E is familiar with explaining why it costs so much to build and maintain San Diego’s energy grid. The utility spent billions to protect its poles and wires against wildfires since the 2007 fires that ravaged parts of San Diego and blamed in part on SDG&E equipment.   

“We’ve invested more than most utilities in the U.S. … to make sure our system is resilient and matches the climate challenges we face,” said Scott Crider, a senior executive at SDG&E.  

The state and local renewable energy mandates also spurred spending. While only fractions of a cent are built into rates to construct electric vehicle charging infrastructure, SDG&E boosted its transportation electrification rate over 700 percent between 2017 and 2020, according to a report from the California Public Utilities Commission. And the company also spent more on transmission lines, the biggest poles and wires a utility can build, which function like the interstate highway of the energy grid. Fifteen percent of customers’ billed price per kilowatt hour in 2019 paid for transmission, the CPUC reported. 

MacKenzie Elmer / Voice of San Diego

Plus, building stuff is the way SDG&E and other investor-owned utilities make money in California. SDG&E is allowed to collect just over a 7 percent rate of return on everything it constructs or maintains or upgrades.  

But SDG&E executives will be the first to tell you that they’re not totally responsible for San Diego’s high electric costs anymore. Nearly 80 percent of their customers now purchase the actual electricity they consume from a public power company called a community-choice aggregator. There are two serving San Diego County: San Diego Community Power and Community Choice Energy.  

Voice of San Diego compared what those two companies offer residents for basic power against other public power companies like them in the state (there are 25). San Diego’s public power offerings are some of the most expensive when compared to public power in Orange County, San Francisco, San Jose, Los Angeles and Ventura. 

These companies don’t make a return on their investments like SDG&E. That is, they don’t turn a profit for investors, but they do accrue and bank cash which they’re supposed to re-invest to buy more renewable energy to reach San Diego’s climate goals.  

Jen Lebron, a spokeswoman for San Diego Community Power, said one reason their prices are high is that the company is still relatively new to the energy market. The business, run by a board of local elected officials, began providing power to its residential customers in 2021 with the goal of providing cheaper and cleaner energy than its investor-owned competitor.  

Part of growing that business, Lebron said, is building cash reserves to earn a better credit rating so it can borrow money cheaper to build its own energy projects.  

“Our goal is to make sure that we’re offering the most significant discount we possibly can while also making sure our organization survives for the long run,” said Lebron.  

When San Diego Community Power set its electricity prices in January, the board looked at offering a cheaper rate. Instead, the board chose to keep some of that cash in reserves and offer a price three percent lower than SDG&E.   

Barbara Boswell, CEO of Clean Energy Alliance, said energy just costs more in San Diego because much of it is imported from other areas.  

“When we go to buy energy from suppliers they have to factor in these costs to get it down here to where we take over delivery of it,” Boswell said. “We need more transmission (lines) or maybe more local generation facilities.”  

Digging Into Some Numbers 

MacKenzie Elmer / Voice of San Diego

SDG&E says the majority of San Diegans now mostly pay them for building, maintaining and delivering energy over the grid.  

So, Voice of San Diego looked at what portion of the average residential electricity price pays for the grid specifically, called transmission and distribution costs. In 2018, grid costs accounted for about 30 percent of the bill. In January, the last time SDG&E set rates, grid costs rose to about 40 percent.  

There are a lot of other things San Diegans pay for with their monthly SDG&E bill. For instance, there’s a charge for public purpose programs, which helps subsidize energy bills for poorer Californians, and shutting down the San Onofre nuclear power plant (called the nuclear decommissioning charge). But transmission and distribution make up the bulk of the delivery side of the bill.  

Electricity is generally most expensive in summertime because that’s when demand is high – because Californians run air conditioning to beat heat waves that are intensifying with human-caused climate change. In the colder winter months, most Californians are using natural gas-powered heaters to combat weather instead.  

SDG&E levels-out spiking summer electric prices by shifting costs onto the winter rates. That’s called the total rate adjustment component or TRAC as it’s listed on rate filings. The company said it began ramping-up the use of TRAC to provide more bill stability between summer and winter – closing the gap between the summer and winter electric prices.  

What About Public Power?  

Public power in San Diego is mostly costlier than other areas of the state served by a community choice aggregator. San Diego Community Power and Clean Energy Alliance offer a summer rate that’s, on average across all times of day, about 25 cents per kilowatt-hour. Clean Power San Francisco, for instance, is about 16 cents per kilowatt-hour. The public power offering in San Jose is around 20 cents per kilowatt hour. In Marin County, it’s about 17 cents.  

Boswell, the CEO of Clean Energy Alliance, said the energy grid is what’s driving up costs.  

“Lots of factors are out of our control,” Boswell said. “But what we can do is control load during peak times when costs are higher.”  
What she means is helping customers use less energy especially when it’s in high demand, when people come home from work, around 4 p.m. to 9 p.m. every day.  

A caveat, though, is more energy conservation means less energy sold. Over the past seven years, SDG&E has seen a continuous decline in energy demand, Crider said.  

“As we’re spending more to upgrade the (grid) system to get to 100 percent renewable energy, sales are decreasing at the same time,” said Crider. 

That’s starting to change. New demand from electrifying vehicles and buildings are already producing an uptick in sales, Crider said.  

“We’ve finally turned a corner,” said Crider. “What’s happening on the grid is what we’ve been predicting.”  

Join the Conversation


  1. The relatively high cost per kilowatt hour from SDGE, along with increasing costs via the tiered billing are going to impact San Diego county residents as they convert from gas water heaters and gas heating furnaces to electric heat pump sources for hot water and home heating. Additionally as residents follow the recommendations from the state to convert gas cooktops to electric induction cooktops and perhaps install electric chargers for electric vehicles, the total kilowatt hours used each month increases which will push ratepayers into ever higher electricity cost tiers.

    The tier system was designed to encourage electricity conservation, not to solve the problems caused by burning fossil fuels for heating homes and water as well as cooking. Given the current and future impacts of climate change and the societal need for conversion from gas fired appliances to electric versions, the regulators and utility managers need to factor in the major negative impact that the current tiered rate system creates. Accordingly, the current tiered rate system will discourage conversion from gas to electric appliances.

  2. Strange that this article never references that SDG&E’s parent Sempra energy recorded record profits last year (NPR article- and barely mentions that the CCA prices, while high, are still regularly LOWER than that of SDG&E. Definitely seems like it builds a narrative of the poor multi-billion dollar utility struggling to do the right thing which is demonstrably false.

    1. Look, the rate design is silly. You can’t give rich home owners a discount for installing solar panels especially when the equipment for delivery of service is just as high as everyone else. Giving subsidized discounts for the poor is not the business of any utility, it is the governments job to do that. Those two rates are diametrically opposed. There aren’t enough normal rate customers to raise their rates and give out all those subsidies. It should be noted that this excessive rate charges are unique to San Diego but there are many utilities throughout the U.S. that are similar or even smaller but don’t have anywhere near the charges.

  3. Also there are more junk charges such as “competition”–there has not been any competition for electricity here in decades. Except for the two agencies, nothing to “transition away from” whose payments go right into SDGE.

  4. I’m on SDG&E rate plan EV-TOU-5. I pay a basic service fee of $16 a month plus peak $0.816/kWh, off peak $0.481 and super off peak of $0.154. How this averages out to 25 cents is quite laughable. The simple average of the three numbers is $0.484. Super off peak is 6 hours during the week and 14 hours on the weekend (34% of hours). Peak is 4-9 every day or 21% of hours. Off peak is 45% of hours, so the weighted average is $0.442/kWh. Plus the $16/month, so I’m paying over 50 cents.

  5. this is biased writing in favor of the power company. it doesn’t explain sdge outsized profits nor the other smaller utility companies that exist in California that in fact deliver power to customers at much cheaper rates in smaller areas than san diego like riverside and imperial county and probably not owned by sempra. not to mention a consumer has zero choice with no options than to pay whatever the cost. I’d like to see that mentioned in this article. monopoly and lobbyists play a huge part in why energy rates are so high. they charge this much because they can and their priority is profitaking for shareholders as it’s a profit generating company.

  6. Is it possible to establish micogrid generation stations using solid oxide fuel cells throughout the county? These can be run on natural gas and they emit water as the waste product. They operate at such a high temperature that no special processing is required for the fuel like PEM fuel cells require.
    Natural gas lines are throughout the county so infrastructure is available.
    Solid oxide fuel cells are highly efficient.

    1. Those fuel cells cannot really manage load changes, they can cover base loads, but need capacitance and something to cover the variable load above peak. I do think micro grids are going to be an important part of our future electrical systems, especially with home batteries and the potential for evs to be hooked up v2g.

  7. The Public Purpose Programs amount to a large slush fund for the city. They have SDG&E planting trees doing all sorts of stuff NOT related to producing and distributing electricity. SDG&E does not care. They are guaranteed a profit on everything they do.

    If you don’t like how high your power bill is, talk to your city council member, the PPP is their goodie bag that you are paying for.

    1. Finally something Higgins and I can agree on. Forcing customers into the scam that is a PPP was sure to drive rates up. The consumer is already paying for a CEO,CFO etc. at SDGE , now we have to pay for a duplicate at the PPP. The guys who can’t maintain your streets now get to run a power company…what could go wrong?

  8. This article continues the line of argument long advanced by SDG&E that rooftop solar customers contribute to higher prices for other customers. That has not been objectively determined and SDG&E has historically blocked efforts to get at the truth. Consider the Sunrise Powerlink which SDG&E built with permission of the PUC. It was an enormously expensive way to get solar power from Imperial County to San Diego and was paid for by SDG&E customers (with SDG&E getting major profits). Rooftop solar reduces the need for and costs of major projects like these. Rooftop solar is paid for by individuals (with support of government subsidies). To the degree that rooftop solar adoption reduces the need for major SDG&E projects, there is potential benefit for remaining non-solar customers. Academic studies differ with respect to the net benefit or detriment, but there is little question that rooftop solar reduces overall carbon emissions and benefits efforts to slow climate change. Demonizing those who have paid for rooftop solar ignores the overall benefit to all.

    1. yes, the city has incentive to let sdge charge higher rates because the city gets kickback to fund projects as mentioned. and talking about rooftop solar was supposed to be a good thing to save on importing costs and generating clean energy. now it’s turned into a have-and-have not argument ignoring clean energy goals incentives. folks who have rooftop solar do have to pay for equipment and maintenance or lease, it’s not free! can you say conflict of interest???

  9. Didn’t SDGE have something like $5bn in undergrounding they never did “forgiven” in the early 2000s? And something like 10 years ago I was told my house would get undergrounded wires in 2037. I’m holding my breath! /s

  10. “People who own rooftop solar generally pay less toward maintaining the energy grid, further reducing the pool from which utilities recoup costs.” What is missing here is that the utility companies don’t pay fair market prices to those homeowners that are contributing their power to the grid. Yet, elected representatives and the power providers say they want more from us. This is very typical misleading and disinformation from those that encouraged home owners to go into the energy production business.

  11. Very disappointing article shilling for SDG&E. No mention of record profits, excessive corporate salaries or the below market rates paid to solar customers adding energy to the grid. SDG&E is a racket business further supported by the politicians in this state. Until we push back as customers and continue to lobby our congressmen nothing will change.

  12. Look at any website with stock information about Sempra. Operating profit margin as well as net profit margin has been flat or slightly higher on average over the last 5 years, with the highest operating profit margin being highest in 2019 and net profit margin being highest in 2020. Net profit margin is HALF in 2022 what it was in 2020. Looking at profit dollars without considering revenue AND costs is misleading. And since the public energy providers are making nearly as much as Sempra, clearly the increase in profits, which the public companies supposedly aren’t making, isn’t what is causing the increase in utility bills. If you sell stuff for more, but pay more to do it, it’s a break even. Until people stop blaming greedy corporate investors, many of which are the pension plans and retirement accounts of retired people, and start looking at the actual policies the govern our power generation and transmission, the problem will persist. And that may just be inevitable, given the apparent desire to move to sources and uses that significantly increase our need for more electricity.

  13. The real solution to this is deregulating the electric supply. All this effort going into calculating profits and regulating based on that is ridiculous – just open up the lines to people’s houses to whoever wants to provision them and let the market determine what a fair price is.

    That will, of course, be significantly lower than it is right now.

    We can see the first steps of that in the CCA, but having a government-protected organization “compete” with a government-controlled organization is hardly competition.

    Same thing would happen that happened when AT&T was deregulated – power companies would find ways to decrease their cost structure, retail pricing would drop, and we’d seen innovation and customer service happening like never before.

  14. I don’t know whether this issue is really about politics, or rich vs poor, or outlandish corporate profits. But I know that I just bought solar (on a 10-year loan). I did this to avoid the average $0.48/kWh which I pay to SDGE, and to contribute to renewable energy generation. My friends who just bought a new house don’t even have a choice. They MUST have solar. I would feel quite upset if there were suddenly a new tax or fee to penalize individuals who acted meaningfully, or as required by the state. Only 12% of California households currently have solar, in a state that’s perfect for it, and where it makes economic sense, even with a storage battery. If utility prices remain high or rise even more, maybe the conversion rate will go up. Not a bad thing. Batteries are a key ingredient, as solar production drops dramatically after about 4pm, just when peak consumption hours start. Sadly home batteries cost several times as much as EV batteries.

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