SDG&E Taking Action on Affordability by Returning $215 Million to Customers

Securing federal tax credits is the company’s latest step to reduce costs for customers while advancing clean energy goals 

SAN DIEGO, July 24, 2023 – As it integrates innovative technologies to help California meet its grid reliability and clean energy goals, San Diego Gas & Electric (SDG&E) is pursuing federal investment tax credits (ITC) for its utility-owned energy storage projects that would result in an estimated $215 million in savings for its customers. The savings from the tax credits will be passed on to customers as part of the company’s efforts to reduce electricity rates and improve energy affordability.  

“By investing in energy storage, we are helping to improve the reliability of the power grid, advancing the clean energy economy and providing some much-needed financial relief to our customers,” said SDG&E CEO Caroline Winn. “Securing federal tax credits for these storage assets is a key part of SDG&E’s affordability strategy to reduce energy costs while improving climate resiliency.”  

SDG&E plans to claim the tax credits in 2024 for its energy storage projects. The tax credits would help offset costs such as other grid improvements related to wildfire safety and new powerlines to enable building and transportation electrification. The overall impact of the tax credits on rates will be determined through the state’s regulatory process. Currently, every $100 million in cost reduction translates into SDG&E’s electric delivery rates getting reduced by about 3%. The savings are expected to be included in the calculation to establish rates in January 2025, along with other regulatory decisions and any new infrastructure. 

Under the Inflation Reduction Act, signed into law by President Joe Biden in August 2022, companies that construct or acquire new clean energy projects can claim tax credits for projects that meet certain criteria.  

SDG&E intends to claim tax credits for eight of its utility-owned energy storage projects listed below. By soaking up renewable energy when it’s abundant and releasing it when it’s needed during peak hours, these facilities help strengthen summer grid reliability and advance California’s goals to become carbon neutral by 2045.  

  • Four energy storage facilities totaling ~ 200MW, which are scheduled to come online this year.  

  • Four energy storage microgrid projects, totaling 39MW, that are being built at SDG&E substations throughout the region to provide backup power to critical community facilities, including schools, libraries/Cool Zones, and fire stations. 

SDG&E has several other initiatives underway to address energy affordability.  

SDG&E recently submitted an application to the U.S. Department of Energy seeking $100 million through the Grid Resilience and Innovation Partnerships Grant program, which is part of the federal Infrastructure Investment and Jobs Act (IIJA). If awarded, the grant would help offset the costs of wildfire hardening efforts, such as the undergrounding of overhead power lines on and around federally recognized Tribal Nations’ land within SDG&E’s service territory. 

SDG&E also filed a fixed price proposal in April with the California Public Utilities Commission (CPUC), in compliance with new state requirements, to reform how consumers are charged for electricity. The proposal is designed to provide up to ~$300 in savings for the average lowest-income household and reduce average electric rates by over 40% for residential customers.  

Additionally, SDG&E continues to advocate for state legislation to transition the cost of certain social programs currently in rates, such as energy efficiency, to the state’s general fund budget, which could reduce average electricity rates by up to 7%.  

SDG&E is an innovative energy delivery company that provides clean, safe and reliable energy to better the lives of the people it serves in San Diego and southern Orange counties. The company is committed to creating a sustainable future by increasing energy delivered from low or zero-carbon sources; accelerating the adoption of electric vehicles; and investing in innovative technologies to ensure the reliable operation of the region’s infrastructure for generations to come. SDG&E is a subsidiary of Sempra (NYSE: SRE). For more information, visit or connect with SDG&E on Twitter (@SDGE), Instagram (@SDGE) and Facebook