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Committee hears SDG&E 2026 rate outlook; staff recommends continuing three vintages and notes PCIA increase
Summary
Rates and strategy staff reviewed SDG&E's preliminary 2026 filings, showing variance between October and November outlooks, a projected ~4'/kWh PCIA increase in the November filing, forthcoming separation of the PCIA line item for transparency, and planned rate-design changes on Jan. 1 and April 1.
San Diego Community Power staff presented an update on San Diego Gas & Electrics preliminary 2026 rates outlook and explained how the utilitys filing affects Community Power's rate development and discount calculations.
Aaron Lou, rates and strategy manager, summarized SDG&Es October and November outlooks and said the November filing reduced the size of the initially projected system-total increase compared with October, though rates are still expected to rise. Lou said SDG&E attributes changes to decreased credit, PCIA true-ups, and revenue impacts from lower market values.
Lou highlighted two practical effects for Community Power customers. First, staff continues to recommend maintaining three sets of Community Power generation rates (phase/vintage-specific rates) so customers across vintages receive comparable discounts given vintage-specific PCIA allocations. Second, SDG&Es filings show the PCIA will be broken out as a separate line item on customer bills starting next year, increasing transparency for customers who previously found PCIA confusing.
Staff also flagged rate-design items included in SDG&Es general rate case phase 2: a seasonality adjustment to reduce summer/winter bill volatility, expansion of certain time-of-use windows across the year, and the creation of a medium-commercial class, with phased implementation on Jan. 1 and April 1. Lou said staff will return with final SDG&E numbers and Community Power rate recommendations after SDG&Es December filings and additional board direction.
What was presented: the November outlook projects PCIA increases on the order of four cents per kilowatt-hour (as presented). Staff will monitor outstanding CPUC items (for example wildfire mitigation costs) and expects to return with final recommendations in early 2026.
