March 1, 2026 SDG&E Natural Gas Rate Increase
SDG&E filed Advice Letter 3498-G (available here) requesting approval to update its natural gas transportation rates effective March 1, primarily to reflect changes in SoCalGas's revenue requirement and to incorporate authorized employee compensation costs.
The filing implements interim recovery of approximately $35.5 million in SoCalGas Distribution Integrity Management Program Balancing Account (DIMPBA) costs from 2019–2023, as authorized by a February 2026 decision (D.26-02-006), along with approved non-officer compensation operating costs for 2024–2026 pursuant to Resolution E-5405. (Related coverage of SoCalGas's parallel advice-letter filing is available here.)
MC
Because SDG&E is a wholesale customer of SoCalGas, a portion of those costs (about $428,000) flows through to SDG&E’s rates under system-wide cost allocation rules.
The rate changes produce minimal customer bill effects, increasing the typical bundled residential bill by only a few cents per month (about 0.05%), while raising SDG&E’s overall gas revenue requirement by roughly $783,000 across customer classes.
The adjustments also modify related rate components for electric generation, natural-gas vehicle service, and transmission-level service to maintain alignment with SoCalGas transportation rates.
Protests are due March 16. Illustrative tables are provided below.
| Customer Class | Vol. (mtherms) | Jan-26 Rate ($/therm) | Mar-26 Rate ($/therm) | Rate Δ ($/therm) | Rev Δ ($000s) | Δ% |
|---|---|---|---|---|---|---|
| CORE | ||||||
| Residential | 270,604 | $2.09918 | $2.10057 | +$0.00139 | +$376 | +0.1% |
| Commercial & Industrial | 178,913 | $0.82119 | $0.82194 | +$0.00075 | +$135 | +0.1% |
| NGV (Post Sempra-Wide) | 23,179 | $0.32830 | $0.33046 | +$0.00216 | +$50 | +0.7% |
| Total Core | 472,696 | $1.52863 | $1.52982 | +$0.00119 | +$561 | +0.1% |
| NONCORE C&I | ||||||
| Distribution Level | 35,337 | $0.38615 | $0.38675 | +$0.00060 | +$21 | +0.2% |
| Transmission Level | 13,965 | $0.07867 | $0.07909 | +$0.00042 | +$6 | +0.5% |
| Total Noncore C&I | 49,302 | $0.29906 | $0.29960 | +$0.00054 | +$27 | +0.2% |
| NONCORE ELECTRIC GENERATION | ||||||
| Distribution (Post Sempra-Wide) | 71,656 | $0.27731 | $0.27871 | +$0.00140 | +$100 | +0.5% |
| Transmission Level | 225,945 | $0.07616 | $0.07658 | +$0.00042 | +$95 | +0.6% |
| Total Electric Generation | 297,600 | $0.12459 | $0.12525 | +$0.00066 | +$195 | +0.5% |
| TOTAL NONCORE | 346,902 | $0.14939 | $0.15002 | +$0.00063 | +$222 | +0.4% |
| SYSTEM TOTAL | 819,598 | $0.94485 | $0.94581 | +$0.00096 | +$783 | +0.1% |
INSTANT ANALYSIS
This is a revealing pass-through adjustment that illustrates how upstream SoCalGas cost-recovery decisions propagate across the Sempra gas system, including SDG&E transportation rates.
The CPUC’s authorization of interim DIMPBA recovery (pending a final reasonableness determination) places ratepayers on the hook now while preserving the possibility of refunds later, a familiar pattern when safety-related integrity costs are at issue.
The negligible residential bill impact masks the larger regulatory signal: pipeline integrity spending and workforce cost pressures continue to accumulate in balancing accounts and are steadily migrating into base rates through interim mechanisms.
For market participants and large transportation customers, the more meaningful takeaway is the system-wide alignment of transportation rates effective March 1, 2026, which confirms that SoCalGas revenue requirement changes remain the gravitational center for downstream rate design across Southern California.
The advice letter also shows the Commission’s continued tolerance for incremental recovery of O&M labor costs outside a full rate case cycle, reinforcing a gradual normalization of piecemeal rate adjustments tied to safety, integrity, and workforce categories rather than comprehensive proceedings.
WHO SHOULD CARE?
- Large gas users and transportation customers. Core commercial, industrial, electric generation, and noncore transportation customers will see small rate changes effective March 1, tied to SoCalGas system costs flowing through SDG&E tariffs. But even minor per-therm shifts matter at scale for facilities burning millions of therms annually.
- Pipeline operators, storage stakeholders, and safety-cost watchers.
The interim recovery of pipeline integrity spending suggests that safety and compliance costs will continue migrating into rates ahead of final reasonableness findings. Anyone tracking the affordability implications of integrity programs should view this as another incremental step in that trend. - Energy traders, procurement teams, and load-serving entities.
System-wide transportation alignment confirms that SoCalGas revenue requirement changes remain the anchor for Southern California gas economics. Entities exposed to basis risk, fuel costs, or dispatch economics should incorporate the updated transportation components into forward cost assumptions. - Ratepayer advocates and affordability groups (lower priority here).
Residential impacts are negligible (only a few cents per month) so this is not a headline consumer issue, but it contributes to cumulative upward pressure from successive interim recoveries.