1 NATURAL GAS AND
ELECTRIC RATES UPDATE
November 2022
2 AGENDA
1. SDG&E overview
2. Preliminary electricity rates outlook
3. Preliminary natural gas rates outlook
4. Customer support offerings
5. Upcoming proceedings with potential rate impacts
3 SDG&E OVERVIEW
South
Orange
County
8 15
5 SDG&E Oceanside Escondido
El Cajon
Imperial Beach
La Jolla
8 San Clemente
Most reliable utility in Western U.S. for 16 years
National leader in wildfire safety innovation
~60% electric system underground
Nearly 20% residential customers with installed solar
~3,500 SDG&E EV charger ports installed
Leading regional labor supporter with 1,400 highly-skilled union employees 53% of employees people of color
39% of SDG&E spend with diverse business
enterprises in 2021
Millions reinvested in local non-profits over past
decade
4 PRELIMINARY ELECTRICITY RATES OUTLOOK
▪ Electric rates generally consist of the cost of electricity and the cost to deliver electricity ▪ For customers that receive their electricity from Clean Energy Alliance (CEA), SDG&E only sets electric delivery rates
▪ Electric delivery rates are currently estimated to increase January 1 driven by investments such as grid updates for safety and reliability, new customer service technologies and helping support the energy transition
▪ The monthly electric delivery portion of the electric bill is preliminarily estimated to increase ~$15 in January 2023 for an average residential customer1 ▪ Total 2023 average electric bill forecast for CEA customers can be calculated following final CPUC approval of SDG&E rates in December, and after CEA publishes rates for 2023 1 Preliminary estimate as of October 2022. Average winter bill for an inland/coastal non-CARE, residential customer using 400 kWh/month on SDG&E’s default residential rate (TOU-DR1) is preliminarily estimated to increase from ~$124/month to ~$139/month in January 2023. Bill impact excludes any impact of Power Charge Indifference Adjustment (PCIA) rates that vary by customer vintage. All estimates are preliminary and subject to final analysis and CPUC rate approval. Bill results may vary based on customer usage, underlying rate schedule and PCIA vintage. 5 PRELIMINARY NATURAL GAS RATES OUTLOOK
▪ Natural gas prices have remained elevated
because of supply constraints and geopolitical
instability
▪ Gas transportation rates are preliminarily
estimated to increase January 1 primarily due
to replacement of aging infrastructure to
maintain safety and reliability1
▪ Natural gas commodity rate will not be set for
January until late December
▪ Average January 2023 residential gas bill is
preliminarily estimated to increase ~$6
relative to January 20221,2
1 All 2023 rate and bill estimates are preliminary as of October 2022 and subject to final analysis and CPUC approvals. 2 January bill is preliminarily estimated to increase from ~$104/month in January 2022 to ~$110/month in January 2023 assuming typical January usage of 44 therms. While bill impacts assume typical January usage, weather and other factors may influence customer usage. Estimated January 2023 bill assumes natural gas commodity rates as of January 2022. The natural gas commodity rate is a function of several factors including weather, supply constraints and geopolitical events. While similar market conditions exist, these market conditions may change before January 2023 natural gas commodity rates are finalized, potentially impacting January 2023 bill estimates. 1 6
CUSTOMER SUPPORT OFFERINGS
1 Includes funds from the Emergency Rental Assistance Program (ERAP) and the California Arrearage Payment Program (CAPP). ERAP funding of ~$20M. CAPP funding includes ~$60M already distributed. 2022 CAPP funds filed and pending.
7 UPCOMING PROCEEDINGS WITH POTENTIAL RATE IMPACTS
▪ General Rate Case Phase 1: Filed every four years to help determine budget required to deliver safe, reliable and sustainable energy; filed May 2022 and decision expected in 2024 ▪ General Rate Case Phase 2: Determines rate design and cost allocations among customer groups; scheduled to file Q4-22
▪ Residential Rate Reform: Redesigning residential rates as required by new California legislation to better support equitability and electrification; scheduled to file Q1-23 ▪ Natural Gas Cost Allocation: Determines cost allocation among natural gas customers and expected usage; filed Q3-22
▪ Tree Trimming Account: Account that tracks costs associated with clearing vegetation near power lines to support safe and reliable operations; expect to file Q4-22 ▪ Catastrophic Events Account: Account that tracks operating costs associated with pandemic related measures; filed Q4-22
▪ Electricity Costs: Costs associated with providing customers electricity and setting departed load indifference fee; scheduled to file 1H-23
▪ Wildfire Mitigation: Operating costs associated with wildfire safety investments; expect to file in 2023