SDG&E for Cannabis Facilities: The 20 kW Line, Two CCAs, and the Smallest DA Allowance in California

Service area and where cannabis sits in it

SDG&E's electric territory is San Diego County plus the southern strip of Orange County. Within it, licensed cannabis is concentrated in San Diego city's industrial zones (Kearny Mesa, Otay Mesa, Mira Mesa), in unincorporated county areas that allow cultivation, and in the handful of cities such as Chula Vista, La Mesa, Oceanside, and Vista that license retail. The mix is retail-heavy, with indoor grows and labs in industrial parks rather than the greenhouse campuses of the Inland Empire or the outdoor acreage of the North Coast.

SDG&E is a participating transmission owner in CAISO alongside PG&E and SCE, so there is no ISO boundary between a San Diego facility and one anywhere else in the state.

San Diego's coastal climate is the mild end of California's 929 cooling degree day average [noaa-cag-california]; inland valleys (Escondido, El Cajon, Ramona) run hotter. For an indoor grow this means lower summer HVAC demand than an Inland Empire site, and for a greenhouse it means marine-layer humidity for much of the year. The cost problem in SDG&E territory is not the climate, it is the price per kWh: SDG&E is the highest-priced of California's three IOUs, and the state's June 2026 commercial average of 27.33 cents per kWh [eia-epm-5-6-a] understates what a San Diego general-service account pays.

The 20 kW line and the business plans

SDG&E's business pricing is organized around a single breakpoint: maximum monthly demand under or over 20 kW [sdge-business-pricing].

Plan family	Demand	Demand charges	Event days
TOU-A	Under 20 kW	None; no capacity reservation charge; no event-day surcharge [sdge-business-pricing]	None
TOU-A2, TOU-A3	Under 20 kW	None; three time periods instead of two [sdge-business-pricing]	None
TOU-A-P, TOU-A2-P, TOU-A3-P	Under 20 kW	None	Up to 18 Reduce Your Use events [sdge-business-pricing]
TOU-M	Over 20 kW	Non-coincident demand charge [sdge-business-pricing]	TOU-M/CPP-D variant: up to 18 Critical Peak Pricing events [sdge-business-pricing]
AL-TOU, AL-TOU2	Over 20 kW	On-peak, non-coincident, and generation demand charges [sdge-business-pricing]	AL-TOU2/CPP-D variant [sdge-business-pricing]
DG-R	Over 20 kW, on-site generation	On-peak and non-coincident demand charges [sdge-business-pricing]	DG-R/CPP-D variant [sdge-business-pricing]

On-peak is 4:00 to 9:00 pm on most plans; on event days the pricing window is 4:00 to 6:00 pm or 4:00 to 9:00 pm depending on the plan [sdge-business-pricing]. The schedule sheets with current prices are in SDG&E's tariff book, linked from the pricing plans page [sdge-business-pricing]; the figures change with rate filings, so we do not reprint them.

Because the breakpoint is 20 kW of maximum monthly demand rather than a three-month or twelve-month test, a single 15-minute interval decides the month. That makes SDG&E the one California utility where a dispensary or small lab can materially change its bill by managing one piece of equipment: the vault condenser, the electric water heater, or a chiller that starts while the HVAC is already running. Soft starters, a staggered start sequence, or a slightly smaller unit can hold an account under 20 kW and off demand charges entirely. The rate classes guide explains the general idea; at SDG&E it is unusually concrete.

Two kinds of demand above 20 kW

For accounts over 20 kW, SDG&E bills a non-coincident demand charge on the highest 15-minute demand in the month at any hour, and on AL-TOU and AL-TOU2 an on-peak demand charge on the highest demand inside the 4 to 9 pm window, plus a generation demand charge tied to the supply side [sdge-business-pricing]. TOU-M carries only the non-coincident charge [sdge-business-pricing], which makes it worth modeling for facilities with high but time-insensitive peaks. DG-R applies to customers with on-site generation and carries on-peak and non-coincident charges [sdge-business-pricing].

The generation demand charge is the piece that distinguishes SDG&E from the other two utilities. When an account is on a CCA or Direct Access, the generation portion of the bill is set by the CCA or ESP, so the generation demand component changes with the provider. Compare providers on the whole generation line, not just the energy price.

For a grow, the on-peak demand charge responds to photoperiod scheduling in the same way as at SCE and PG&E; see demand charges explained. For a lab or a store, the non-coincident charge is the one to manage, and the CPP-D event plans are worth a look if the facility can shed load for a few hours on a hot afternoon. Our demand response guide covers what shedding realistically looks like for each facility type.

Generation: two CCAs serve most of the territory

SDG&E territory is unusual in that Community Choice Aggregation is the norm rather than the exception. Two CCAs, Clean Energy Alliance and San Diego Community Power, serve more than 80 percent of the customers in SDG&E's territory [sdge-cca]. A CCA customer's SDG&E bill has three parts: an electric generation charge from the CCA, a delivery charge from SDG&E, and taxes and fees SDG&E collects for mandated programs [sdge-cca]. Enrollment was automatic when each CCA launched; opting out is free during the notice period and the first 60 days of service, and afterward may carry conditions and requires a one-year stay on bundled service before rejoining [cpuc-cca-faq]. Opt-out requests go to the CCA, not SDG&E [cpuc-cca-faq].

The comparison for every cannabis account is the CCA's commercial generation rate plus the Power Charge Indifference Adjustment against SDG&E's bundled generation rate, re-run each October when the PCIA is re-forecast [cpuc-pcia]. Both CCAs offer tiered products with higher renewable content at a premium; for a brand that wants to claim renewable supply, that is the simplest path in the territory.

Direct Access at SDG&E

SDG&E's DA Load Allowance is 3,942 GWh [sdge-direct-access], its share of the statewide cap of roughly 28,800 GWh [cpuc-direct-access]. Six-month notices to transfer are filed through SDG&E's Notice of Intent process during the June window, and registered ESPs are listed by the CPUC [sdge-direct-access]. In the 2023 lottery SDG&E had 45 GWh available, received 267 valid notices, enrolled through lottery number 89, and ended the year with 194 customers still on its waitlist [cpuc-da-lottery-2023]. That is the tightest ratio of the three utilities.

The advice is the same as at PG&E but stronger: file every June because it is free and because headroom opens when an existing DA customer returns to bundled service, but do not build a budget on winning. A facility that acquires a site already on DA should protect that status; returning to bundled service anywhere in California triggers an 18-month minimum commitment before re-entry. The process is in the switching guide.

Interconnection and metering notes

Most SDG&E cannabis facilities are in existing industrial buildings, and the question is usually whether the building's service can carry a grow rather than whether the circuit can. A 200 to 500 kW retrofit of a warehouse originally served at 200 amps often requires a service upgrade and a new transformer, which SDG&E schedules through its service planning process; start it early. Keep cultivation and non-cultivation loads on separate meters where possible, and if you install solar or storage, understand that DG-R is the plan you will be placed on, with its own demand structure [sdge-business-pricing].

Worked cost: 35 kW dispensary on TOU-A vs TOU-M

Assume a San Diego storefront with 9,500 kWh monthly use and a 35 kW maximum demand peak from HVAC plus vault refrigeration (inputs, not EIA facts) [sdge-business-pricing] [eia-epm-5-6-a].

Scenario	Schedule	Demand charges	Illustrative monthly total
Under 20 kW peak	TOU-A	None [sdge-business-pricing]	Energy only at bundled rates
One bad month at 35 kW	TOU-M	Non-coincident $/kW on 35 kW [sdge-business-pricing]	Energy plus monthly demand line
Same load, AL-TOU2	Over 20 kW	On-peak, non-coincident, and generation demand [sdge-business-pricing]	Highest demand stack

Pull current $/kW from SDG&E tariff sheets before budgeting [sdge-business-pricing]. At California's June 2026 commercial average of 27.33 cents per kWh, 9,500 kWh is about $2,596 in energy alone [eia-epm-5-6-a]. A single $12/kW non-coincident charge on 35 kW adds $420 per month before riders [sdge-business-pricing]. That is why SDG&E retail operators treat 20 kW as a hard design target.

San Diego Community Power vs Clean Energy Alliance for cannabis accounts

San Diego Community Power covers San Diego city, Chula Vista, La Mesa, Encinitas, Imperial Beach, and unincorporated San Diego County among its members [sdge-cca]. Clean Energy Alliance serves Carlsbad, Del Mar, Escondido, Oceanside, Solana Beach, and Vista [sdge-cca]. A multi-store operator with sites in both CCAs manages two generation rate sheets on one TDU delivery tariff [sdge-cca] [cpuc-pcia].

Compare each CCA's commercial product plus PCIA against bundled SDG&E generation every October when PCIA is re-forecast [cpuc-pcia]. SDG&E's DA waitlist was 194 customers deep after the 2023 lottery with only 45 GWh of headroom, so CCA comparison is the practical supply task for most San Diego cannabis accounts [cpuc-da-lottery-2023].

Efficiency programs

SDG&E runs business energy efficiency and demand response programs covering lighting, HVAC, refrigeration, and custom measures, but we were not able to open a current SDG&E program page for horticultural lighting specifically while writing this page, and we have not found a cannabis-specific LED rebate at SDG&E comparable to PG&E's AESAP or SCE's AgEE. Ask SDG&E's business customer group for the current business rebate catalog and whether a horticultural LED custom measure is available before you buy fixtures. The Title 24 controlled environment horticulture rules apply to any permitted grow in the territory regardless of rebate availability; see the cultivation page.

For a dispensary in the territory, the dispensary page works through the 20 kW question in detail, and the dispensary bill FAQ has general benchmarks. For the neighboring utility with better DA odds and a cannabis LED rebate, see Southern California Edison.