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SDG&E Aims to Save Customers $300 Million by Phasing Out Costly Energy Programs

In a significant move to improve energy affordability, San Diego Gas & Electric (SDG&E) requested approval from the California Public Utilities Commission (CPUC) to discontinue several energy efficiency programs, which would reduce administrative costs and increase energy affordability for its customers. This strategic move is expected to save customers over $300 million between 2026 and 2031.

“We know affordability is paramount for customers, and we strive to ensure that dollars spent bring meaningful benefits through our Fit for 2025 initiative designed to lower the company’s cost structure,” said Caroline Winn, SDG&E’s Chief Executive Officer. “By requesting the CPUC to phase out these non-cost-effective programs, we aim to keep customers' bills as low as possible."

Rising energy costs are a significant challenge in the state, with certain efficiency program costs increasing annually. If approved, SDG&E’s request to discontinue these programs would support efforts to enhance energy affordability by removing or consolidating utility programs that lack measurable benefits. This aligns with Governor Gavin Newsom’s October 2024 Executive Order and a State Auditor report, both of which recommended modifying or phasing out ineffective ratepayer-funded programs.
 
In a report released in March 2025, Cal Advocates urged the CPUC to stop funding programs that are not cost-effective or beneficial. The report states: “To address the affordability crisis facing ratepayers and advance the state’s climate and energy goals, it is critical to reevaluate funding sources for programs deemed non-cost-effective if they do not provide real benefits to ratepayers.” The report also highlights that while energy-efficient initiatives helped reduce energy costs in the past by reducing energy use, their effectiveness has diminished over time with the implementation of higher efficiency standards.

If approved, SDG&E’s request would channel the $300 million in savings directly back to customers. All eligible SDG&E customers would continue to benefit from statewide energy efficiency incentives, providing ongoing support and savings for households across the region.  Importantly, these cost-reducing efforts do not impact low-income programming, including the California Alternate Rates for Energy and Family Electric Rate Assistance programs.

The shift is part of SDG&E’s larger effort to enhance affordability for families and businesses while maintaining exceptional service, reliability and safety. SDG&E efforts include:

  • The implementation of Fit for 2025, a business initiative that focuses on driving affordability for customers by enhancing operational efficiencies through technology investments, strategic alignment, and continued improvement initiatives.
  • Working to address policy-driven mandates that continue to put upward pressure on electric bills, such as Public Purpose Programs – which have nearly tripled since 2012. 
  • Advocating changes to state and federal policies to remove extra costs from customer bills and increase savings through tax credits, such as battery storage tax incentives. In fact, SDG&E was able to return about $200 million in federal tax credits to customers in 2025. 

By phasing out these costly and ineffective energy efficiency programs, SDG&E aims to ensure that every dollar spent contributes to meaningful savings and enhanced energy affordability for all customers.

About SDG&E
SDG&E is an innovative energy delivery company that provides cleaner, 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 recognized leader in its industry and community, as demonstrated by being named Corporate Partner of the Year at the San Diego Business Journal’s Nonprofit & Corporate Citizenship Awards and receiving PA Consulting's ReliabilityOne® Award for Outstanding Reliability Performance for 18 consecutive years. SDG&E is a subsidiary of Sempra (NYSE: SRE), a leading North American energy infrastructure company. For more information, visit SDGEnews.com or connect with SDG&E on social media @SDGE.

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  • affordability