SDG&E only earns profit for its shareholders by spending money on capital projects it owns—poles, wires, substations, and transmission lines. For 2026–2028, regulators authorized SDG&E roughly a 10% return on equity (ROE) for capital spending.
When SDG&E builds a multi-billion-dollar transmission line, that asset is added to its "rate base." Over its 40- to 50-year lifespan, ratepayers don't just pay back the construction cost; they pay billions more in guaranteed shareholder profit.
Let's say that the final cost for this project is $2B, SDGE is allowed to collect about $200M per year from his rate payer for his share holders. This means over 40 year, rate payers will pay an additional $8B in "interest" to SDGE share holders. This is quite a high interest rate to pay these days!
So, SDGE is financially incentivized to favor massive overland transmission projects over cheaper, safer local alternatives, such as rooftop solar, parking-lot solar canopies, urban battery storage, microgrids, and line upgrades (reconductoring).