Funding for undergrounding projects took a big hit when the California Public Utilities Commission (CPUC) decided to sunset the statewide Rule 20A program which has existed since 1967. In response, the City has been working with SDG&E to ensure that remaining Rule 20A work credits will be used to bring to completion those Rule 20A projects that were already in construction when the decision took effect. The City is also formulating plans to continue funding those projects that fell into unfunded status because of the CPUC decision by using its existing surcharge program. 

CPUC Rule 20 sets policies and procedures for the conversion of overhead power lines to underground facilities. These projects are funded by ratepayers in which the investor-owned electric utilities (IOU) provide cities and counties an annual allocation of work credits representing an amount the IOU will spend on the agency’s behalf to underground overhead facilities.

On June 3, 2021, the CPUC issued a decision that significantly revised the rules for the Rule 20 program. The decision was officially called “Phase 1 Decision Revising Electric Rule 20 and Enhancing Program Oversight.” This decision discontinued authorization of new Rule 20A work credits for allocation after December 31, 2022. Additionally, municipalities would not be permitted to borrow future work credits beyond 2022 work credit allocations. With this decision now in place, municipalities can continue to use these work credits received prior to December 31, 2022, until December 31, 2033, at which time they will expire permanently.

Per the Commission’s direction, SDG&E notified each community, including the City of San Diego, of its existing work credit balance. Once the remaining work credits are used, no more will be provided to the City, which will eventually bring the Rule 20A program to an end.

The City and SDG&E have cooperated to ensure that no construction will be left unfinished. The 30 projects that were in construction when the ruling took effect have continued construction using the City’s remaining balance of Rule 20A work credits. Of these, 11 projects have completed undergrounding construction and the remaining are ongoing and will be completed. There were 133 future Rule 20A projects that lost their funding when the CPUC decision took effect. These will be added to the pool of projects that the City is planning to build using surcharge funds that are budgeted by the City using franchise fees. The decisions to initiate projects from this pool will be based on projected availability of funds and the City’s prioritization criteria. For questions regarding the Rule 20A program, please visit the CPUC website.