Today SDG&E filed with the California Public Utilities Commission a proposal to update the company’s overall rate of return to 10.03%, including its return on equity (14.3%). This request is similar to past cost of capital filings but also includes proposals to account for the increased wildfire risks and liabilities that are prevalent in California.
While we believe our wildfire mitigation programs are extremely effective, the liability construct that exists today in the State of California results in a higher return on equity than would otherwise be the case. If approved, the cost of capital proposal would help SDG&E continue to enhance community resiliency, wildfire safety and clean energy technologies.
SDG&E has pioneered investments in power grid reliability, wildfire safety programs and infrastructure for more than a decade. Updating the return on equity will ensure the company can continue to attract investors to help build and improve the region’s clean, safe and reliable energy grid.