SAN DIEGO (CNS) — San Diego Gas & Electric is seeking federal investment tax credits for its energy storage projects which would represent millions in savings for its customers, it was announced Monday.
The tax credits the utility company are pursuing would add up to $215 million in savings, a release from the company read.
"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," SDG&E CEO Caroline Winn said. "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. They would help offset costs such as "other grid improvements related to wildfire safety and new powerlines to enable building and transportation electrification," a company statement read. As it stands, every $100 million in cost reduction translates into SDG&E's electric delivery rates getting reduced by about 3%.
Any savings from the tax credits are expected to be included in the calculation to establish rates in January 2025, along with other regulatory decisions and any new infrastructure.
The company also recently submitted an application to the U.S. Department of Energy seeking $100 million through the Grid Resilience and Innovation Partnerships Grant program. 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.
The announcement comes just a week after the San Diego City Council's Environment Committee heard a report which suggested the city could save millions by purchasing its power grid from SDG&E -- a process called municipalization.
However, a company spokesman said the city had already made a good decision two years ago to renew the franchise agreements for power and gas with SDG&E.
"We remain confident that once the city has all the facts, they will again arrive at the same conclusion reached in 2021 when they approved the recent franchise agreement: a long-term partnership with SDG&E remains the best option given our nearly 150-year history of providing best in class service, safety and climate innovation, and unmatched grid reliability to San Diego customers," company spokesman Anthony Wagner said.
"Our relationship with the city remains strong, and we are laser- focused on executing on the commitments made during the franchise negotiations while addressing the affordability challenge facing utilities across the country."
The report suggested the city could save $180 million over the course of 30 years from a hypothetical $6 billion sale.
