San Diego Gas & Electric (SDG&E) is planning major grid upgrades in a proposal that could see monthly gas and electric bills rising by more than $9.

The utility wants to safeguard energy reliability against growing climate threats and build a clean energy future.

These are the driving forces behind the 2024-2027 budget proposal it filed with the California Public Utilities Commission (CPUC). Every four years, regulated utilities in the state are required to file what are formally known as general rate cases (GRCs) outlining their capital investments and forecasted costs for operations and maintenance.

In addition to maintaining safety and reliability standards, the GRC also supports regional plans to reduce emissions, and the state of California’s goal to achieve carbon neutrality by 2045.

“Average electric bills at our company are the lowest among California’s electric investor-owned utilities, but we also recognise this is a difficult time to ask our customers to pay more given the state of the economy and inflationary pressures and are mindful of every dollar that we ask our customers to pay,” said SDG&E president Bruce Folkmann.

If the rate case is approved as submitted, the average residential customer could expect a monthly electric bill increase of about $9 compared with 2023, and a monthly natural gas bill increase of about $9.60 compared with 2023. SDG&E anticipates the CPUC to make a decision in about 18 months, with the new rates taking effect in January 2024.

“Given the changes in climate and the growing need for a clean energy future, this will ultimately result in improvements that create long-term benefits now and for future generations,” said Folkmann. “The budget proposal we put forth represents the conscientious efforts of hundreds of SDG&E employees to strike the right balance between holding down costs and making the infrastructure investments needed for a clean energy future.”

According to a recent study conducted by SDG&E, electrification of buildings and vehicles is crucial for California to become carbon neutral. The analysis indicates electricity consumption in the state could nearly double by 2045. Meeting this increased demand will require a significant expansion of the power grid both to meet emissions reduction targets while also maintaining grid reliability.

Major investments outlined in the budget proposal include expanding, operating and maintaining electric vehicle (EV) charging infrastructure throughout the region, given all passenger vehicle sales in California are required to be zero-emission by 2035, followed by the requirement that all medium and heavy-duty vehicle sales are to be zero-emission by 2045, where feasible.

The utility wants to modernise the electric grid with smart technology to integrate significantly more solar and wind generation, residential and commercial-scale battery storage, EV charging, and customer transition from natural gas to electric appliances.

Cutting the risk for power outages could be achieved by adopting grid automation and remote sensing tools and replacing aging or failure-prone equipment, such as underground tee connectors and corroded overhead switches.

Customers should get more control, access and insights into their energy usage by installing smart meters.

The plan also is to install more utility-scale battery systems at strategic locations to increase the use of solar energy, which is often curtailed in the middle of the day because there is more supply than demand, and to support reliable service during periods of high energy demand, such as extremely hot summer days.

There is an aim to develop additional clean fuel sources, such as green hydrogen for transportation and electric generation with the goal of supporting greater electrification.

Wildfire risk and public safety power shutoffs could be reduced by hardening 950km of power lines between 2022 and 2024, either by burying them underground or insulating them. Upgrading microgrids with zero-emissions energy resources such as battery storage should keep vulnerable communities and critical resources, such as healthcare and Calfire facilities, powered during power shutoffs.

Cyber security will be strengthened and technology infrastructure improved to address the risk of ever-changing security threats that could potentially disrupt business operations and place customer and employee health and safety at risk. These upgrades also will help secure customer data to meet stronger privacy regulations.

And there is a plan to accelerate the replacement of aging plastic natural gas pipelines to improve safety and reliability and reduce methane emissions.

SDG&E provides clean, safe and reliable energy for people in San Diego and southern Orange counties. It is a subsidiary of Sempra.