Sdg&E Power Purchase Agreement

SDG&E Power Purchase Agreement: What You Need to Know

San Diego Gas & Electric (SDG&E) is an energy utility company that serves customers in southern California. As part of its commitment to renewable energy, SDG&E has entered into a number of power purchase agreements (PPAs) with various renewable energy companies. In this article, we will discuss what a power purchase agreement is, how it works, and why SDG&E has entered into these agreements.

Power Purchase Agreement Defined

A power purchase agreement (PPA) is a contract between an energy utility and a renewable energy company. The contract outlines the terms under which the energy utility will buy electricity from the renewable energy company. PPAs are a common way for energy utilities to purchase renewable energy as they provide a long-term financial commitment to the renewable energy company and allow the energy utility to meet renewable energy goals.

How it Works

Under a PPA, the renewable energy company is responsible for building and operating a renewable energy facility, such as a solar or wind farm. The energy utility agrees to purchase all or some of the electricity generated by the facility for a set price and duration. The length of a PPA can vary from a few years to several decades.

Why SDG&E has Entered into Power Purchase Agreements

SDG&E has entered into multiple PPAs as part of its efforts to increase the amount of renewable energy it generates. The California Public Utilities Commission has set a goal for SDG&E to generate 50% of its electricity from renewable sources by 2030 and 100% by 2045. PPAs allow SDG&E to purchase renewable energy from third-party companies, which helps them to meet these goals while also supporting the growth of the renewable energy industry. Additionally, PPAs can provide a stable and predictable source of energy for SDG&E, which can help to stabilize electricity prices.


SDG&E`s power purchase agreements with renewable energy companies are a key part of the company`s strategy to meet California`s renewable energy goals. These agreements allow SDG&E to purchase a stable and predictable source of renewable energy while also supporting the renewable energy industry. As more energy utilities adopt renewable energy, we can expect to see more PPAs being signed in the future.