SDG&E Natural Gas Rates for January 1, 2026: Transport Rates Down, Bills Up

SDG&E filed Advice Letter 3484-G (available here) to implement the consolidated update to its gas transportation rates effective January 1, 2026. Protests are due January 20. (For comparative context, see our summary of SDG&E's preliminary January 1 filing here.)

AL 3484-G details a net decrease of approximately $22.5 million (-2.8%) in SDG&E’s overall gas transportation revenue requirement, inclusive of franchise fees and uncollectibles. This consolidation is driven by amortized regulatory account balances, updated cost-of-capital parameters, post-test-year revenue requirement adjustments, reduced natural gas leak abatement costs, and the return of Low Carbon Fuel Standard credits for natural gas vehicle service.

Core customers account for the bulk of the reduction ($22.1 million), with a smaller decrease for noncore customers ($0.4 million), partially offset by updated cost allocations from SoCalGas and harmonization of certain rates across the two utilities.

While transportation charges will decline, typical bundled residential bills are projected to increase modestly in 2026 due to higher gas procurement costs and Public Purpose Program surcharges, which offset transportation charge decreases (see chart below, which excludes the California Climate Credit).

Meanwhile, illustrative transportation rates, as provided by SDG&E, are available below. The largest increases occur on the noncore transmission side because Sempra-wide cost normalization shifts upstream SoCalGas transportation costs onto transmission service, reinforcing the distinction between backbone and distribution pricing without increasing total noncore revenue.