SDG&E April 1 Filing: Wildfire Track 2 Adds $48 Million/Year; Delivery Rates Up 1.3%, Residential Bills Slightly Down
A new SDG&E Advice Letter (4791-E, available here) implements rates adopted in the company's 2024 General Rate Case Phase 2 decision (D.25-09-006) and in the Track 2 wildfire mitigation cost-recovery decision (D.26-01-021). These changes will take effect April 1.
System average electric delivery rates (excluding the California Climate Credit) will rise by about 0.3¢/kWh, or 1.3%, and total bundled average rates will increase by 0.7%, primarily due to recovery of 2019–2022 Wildfire Mitigation Plan costs.
MC
SDG&E will amortize $181.3 million in electric wildfire undercollections over 45 months, adding approximately $48.3 million annually to distribution revenue requirements.
Despite the overall rate increase, typical bundled residential bills are projected to decline modestly (−0.6% for non-CARE; −1.5% for CARE), largely because SDG&E is expanding the weekday Super-Off-Peak period (10 a.m.–2 p.m. year-round), which shifts more usage into lower-priced hours.
| TOU Period | Weekdays | Weekends and Holidays | ||
| Summer | Winter | Summer | Winter | |
| On-Peak | 4 PM - 9 PM | 4 PM - 9 PM | 4 PM - 9 PM | 4 PM - 9 PM |
| Off-Peak | All other hours | All other hours | All other hours | All other hours |
| Super Off-Peak | Midnight - 6 AM ; |
Midnight - 6 AM ; |
Midnight - 2 PM | Midnight - 2 PM |
The filing also:
- Creates a new Medium Commercial class (20–200 kW, with exceptions for certain schedules);
- Restructures commercial monthly service fees through phased annual increases differentiated by class (15% for Medium Commercial, 10% for Large C&I, 7.5% for Large C&I–Substation, and 5% for both Small Commercial and Agricultural, capped at marginal cost levels);
- Updates revenue allocations across customer classes;
- Adjusts marginal distribution costs; and
- Maintains existing marginal generation cost differentials based on SDG&E's 2019 marginal cost study.
SDG&E is also implementing a three-year glidepath to bring the EV-TOU-5 Super-Off-Peak distribution rate to marginal cost, rising from $0.02601/kWh in Year 1 (April 2026) to $0.04812/kWh in Year 3 (January 2028).
In addition, SDG&E:
- Revises Medical Baseline benefits toward a standardized 20% line-item discount via a glidepath reducing the tiered-schedule discount from 21.64% in 2026 to 9.50% by 2029;
- Increases the commercial CARE (Expanded Low Income) discount from 20% to 35%; and
- Updates various public purpose program and balancing account components consistent with prior CPUC decisions.
The following table provides illustrative class-average rates, inclusive of the California Climate Credit.
SDG&E Advice Letter 4757-E · All rates in ¢/kWh
| Customer Class | Current Rates (1/1/2026) | Proposed Rates (4/1/2026) | Total Rate Change | |||||
|---|---|---|---|---|---|---|---|---|
| Delivery | Commodity | Total | Delivery | Commodity | Total | ¢/kWh | % | |
| Residential | 25.650 | 17.532 | 43.182 | 26.302 | 17.549 | 43.851 | +0.669 | +1.55% |
| Small Commercial | 23.885 | 15.391 | 39.276 | 24.665 | 15.665 | 40.330 | +1.054 | +2.68% |
| Medium Commercial | — | — | — | 20.358 | 18.251 | 38.609 | — | — |
| Large Commercial | 18.903 | 19.278 | 38.181 | 18.904 | 19.193 | 38.097 | −0.084 | −0.22% |
| Agriculture | 14.350 | 13.041 | 27.391 | 14.288 | 12.009 | 26.297 | −1.094 | −3.99% |
| Lighting | 22.940 | 11.994 | 34.934 | 14.545 | 11.981 | 26.526 | −8.408 | −24.07% |
| System Total | 21.647 | 17.676 | 39.323 | 21.948 | 17.657 | 39.605 | +0.282 | +0.72% |
The table below provides illustrative class-average rates, excluding the Climate Credit.
SDG&E Advice Letter 4757-E · All rates in cents/kWh
| Customer Class | Current Rates (1/1/2026) | Proposed Rates (4/1/2026) | Total Rate Change | |||||
|---|---|---|---|---|---|---|---|---|
| Delivery | Commodity | Total | Delivery | Commodity | Total | c/kWh | % | |
| Residential | 28.167 | 17.532 | 45.699 | 28.819 | 17.549 | 46.368 | +0.669 | +1.46% |
| System Total | 22.502 | 17.676 | 40.178 | 22.803 | 17.657 | 40.460 | +0.282 | +0.70% |
Protests are due March 23.
INSTANT ANALYSIS
This is a compliance filing, but it moves real money. SDG&E adds about $48 million per year of Track 2 wildfire recovery into distribution rates through 2029, producing a system average delivery increase of about 1.3%. The near-term rate effect is modest, yet wildfire amortization continues embedding itself in base distribution revenue.
The more consequential shift is in rate design. SDG&E creates a new Medium Commercial class (20–200 kW), phases in higher commercial monthly service fees at varying rates by class, and updates customer class revenue allocations. Over time, that shifts more cost recovery toward fixed charges for mid-sized commercial customers.
On the residential side, the year-round expansion of the 10 a.m.–2 p.m. Super Off-Peak window strengthens midday load-shifting incentives. Typical residential bills will decline slightly even as average rates rise, showing how TOU design now drives outcomes as much as revenue requirement. The EV-TOU-5 glidepath sends a similar signal on the EV side; SDG&E is steadily repricing its most aggressive promotional rate toward cost.
In short, the main themes of this filing are: moderate upward rate pressure, continued wildfire cost-recovery absorption into base rates, and steady recalibration of bill design.