The CPUC voted 3-2 to issue a temporary restraining order preventing SDG&E from implementing the shutoff plan until the regulatory body has a chance to fully review the proposal.
The CPUC has scheduled a September 10 hearing on SDG&E's plan.
Commissioners John Bohn and Rachelle Chong cast the dissenting votes.
During the hearing in San Francisco, Bohn said it should be up to SDG&E to decide when power should be shut off to protect the public.
"I don't want to take from SDG&E the responsibility and the liability for making the most important safety-oriented decisions and offloading that kind of decision on us," Bohn said. "It is appropriate that they make the decision on when a safety hazard exists, such that the danger to the population is sufficient.
SDG&E spokeswoman Stephanie Donovan said the utility will abide by the CPUC's decision.
"We don't agree necessarily with the decision today, but we respect and will abide by the Public Utilities Commission's decision," Donovan said.
Donovan said she is hopeful the CPUC next month will approve SDG&E's shutoff plan, a proposal she described as a "critical tool" in protecting the electrical system and public safety during extreme fire and weather situations.
"We hope they will find some middle ground there that will allow us to move forward with the plan and prevent another catastrophic wildfire in the region," she said.
In a statement, county Supervisor Dianne Jacob applauded the CPUC's decision to "put a stop to SDG&E's arrogant and unilateral attempt to implement its shutoff plan prior to a formal decision by state regulators."
"This is a victory for public safety and a victory for opponents of this bad plan," she said. The utility wanted to shut off power to rural areas of the county, starting September 1, when extreme weather conditions, including high winds and low humidity, create an accelerated risk of wildfire.
The utility proposed the shutoff plan after state investigators, including the CPUC, concluded it was SDG&E's power lines that sparked the wildfires that devastated San Diego County in 2007.
So far, SDG&E has agreed to pay about $740 million to settle lawsuits stemming from the wildfires. SDG&E has been sued by residents who lost their homes and municipalities seeking to recover hundreds of millions of dollars in damages.
Supporters of the SDG&E plan say it is necessary to prevent catastrophic wildfires in the future.
Critics, however, argue it would leave vast parts of the county without vital services during times of emergency, including water pumping, telephones, radios and the use of medical devices.
Two competing recommendations are before the CPUC on September 10.
Administrative law judge Timothy Kenney recommended earlier this month that the CPUC reject SDG&E's plan, finding the utility "has not met its burden to demonstrate that the benefits of shutting off power outweigh the significant costs, burdens and risks that would be imposed on customers and communities in the areas where the power is shut off."
Commissioner Timothy Simon recommended SDG&E be allowed to implement the shutoff plan as a test until the end of the year, but that tough restrictions be imposed.