How Rates Are Set

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How Rates Are Set

Our mission is to safely deliver reliable, affordable, clean energy.

The General Rate Case (GRC) funds SCE’s day-to-day operations, including maintenance and grid upgrades. Every three years, the California Public Utilities Commission (CPUC) reviews our request for the next three-year spending cycle. Starting with SCE’s 2025 GRC, this process will transition to a four-year cycle.

The GRC makes up about half of customer rates. Another one-third comes from the cost of energy sources for power, which are passed on to customers without markup or profit for SCE. The remaining costs come from other factors, such as large transmission projects regulated by the Federal Energy Regulatory Commission, and programs for energy efficiency and income-qualified customer assistance.

On August 30, 2019, SCE filed a request to recover costs from 2021 through 2023 for employees to inspect, repair, and, when appropriate, upgrade poles, transformers, and distribution lines. Across our service area, SCE owns more than 1.4 million electric poles, 725,000 transformers, and more than 105,000 miles of distribution lines serving 5 million customer accounts.

The funding will be used to: 

  • Replace or repair poles, wires, transformers, and other infrastructure. 
  • Harden the grid against wildfires by insulating power lines, installing fire-resistant poles, removing vegetation hazards, and intensifying power line inspections in high fire risk areas. 
  • Enable crews and customer support staff to respond to emergencies, such as wildfires and earthquakes, and restore service as quickly and safely as possible. 
  • Invest in equipment, software tools, and improved operational practices, to help make the electric grid more reliable and fire resistant. 
  • Upgrade to newer equipment that will make it easier to restore power after emergency outages. 
  • Update cybersecurity, to protect the grid from hackers and further protect customer data. 
  • Advance SCE’s clean energy vision, enhance system reliability, support our customers’ technology preferences, and help California meet its clean energy goals. 

State Regulators, Utilities, and the Public – Working Together to Set Rates

We work with the CPUC, the body regulating the state’s investor-owned utilities, in a publicly transparent rate setting process, which includes public input and participation. All investor-owned utilities follow the same process. 

Annual Energy Pricing Updates

At the start of each year, SCE and other California utilities are required to update energy pricing to reflect the costs of providing clean, safe, and reliable service.   

On January 1, 2022, SCE updated our electricity rates. The average electricity price increased by about 2.7%. The main drivers of this increase were higher wildfire mitigation costs and energy transmission rates.   

SCE adds no markup to the energy it purchases to deliver to customers; for every dollar SCE pays for purchased power, customers pay one dollar.

Aside from market conditions, your bill is affected by your energy usage, weather, state mandates, and climate resiliency investments.  


Cost Breakdown Per Dollar

  • 46₵ - generation costs of non-SCE owned energy sources, including solar, wind, and natural gas, and SCE-owned generation, including hydro and natural gas plants.
  • 37₵ - distribution grid maintenance and new equipment, including poles, wires, and substations. 
  • 8₵ - transmission investment in operations and high-voltage transmission line maintenance. 
  • 5₵ - wildfire-insulated wire, vegetation clearing, enhanced inspections, weather stations, high-definition cameras, and insurance. 
  • 4₵ - state-mandated public purpose programs, including incentives for energy efficiency and protection for income-qualified customers. 

This breakdown shows SCE’s costs to serve customers and implement state policies. It is based on calculations from June 2021. 

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Balancing Public Policy with Affordability

To keep rates affordable and fair, we balance the need to modernize infrastructure for reliability with meeting state policy requirements for initiatives like renewable energy. To do this, we work with local, state, and federal officials, and keep you informed throughout.

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