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CPUC Approves Bill Reduction
The California Public Utility Commission week before last approved a proposal that eliminates the difference between winter and summer rates for customers on tiered pricing plans as reported by the San Diego Union Tribune. This reduction is not tied to the COVID-19 pandemic.
All five of the commissioners at the Public Utilities Commission signed off on the proposed decision without comment, passing the item through as part of the commission’s consent agenda.
About 836,000 SDG&E residential customers are on time-of-use while about 476,000 are on other plans, including tiered rates.
The change will become effective by no later than June 1, 2020.
Summer Rates and Winter Rates to be the Same
SDG&E proposed eliminating the difference between summer rates (June 1 to Oct. 31) and winter rates (Nov. 1 to May 31) as a way to reduce big swings seen in some customer bills by about 1/5th. Summer rates are much higher than winter rates as many residents put greater demand on the state’s power grid during hot months by running air conditioners and fans, and using pools more often.
SDG&E estimates a typical customer’s summer bills will decrease $6.63 per month but will increase $4.06 per month during the winter.
Customers who take part in California Alternate Rates for Energy, or CARE programs, by meeting certain income qualifications, will see similar changes in their bills with an estimated savings of $3.57 per month during the summer and an increase of $2.36 a month during the winter.
Under the tiered rate system, customers pay more when as they use more electricity, with the price per kilowatt-hour rising as customers’ increased usage moves them from one tier to another.
SDG&E provided information tables to the utilities commission, showing for example the Tier 1 rate is 28.8 cents per kilowatt-hour. It then moves up to 39.2 cents per kWh on Tier 2 when usage exceeds 130 percent of a pre-assigned baseline. If consumption goes over 400 percent of the baseline, a “high usage charge” of 55.1 cents per kWh kicks in.
During the winter, prices are about 2 to 5 cents per kWh cheaper per tier.
Under the new system, SDG&E expects the Tier 1 rate to be 27.5 cents per kWh, with Tier 2 costing 37.4 cents and the high usage charge coming in at 52.6 cents per kWh during both summer and winter months.
Time of Use Rates Not Reduced
The CPUC did not approve SDG&E’s request to extend the change to the remaining 70 percent of the utility’s customers who get billed through time-of-use rates.
Some consumer advocates opposed extending the SDG&E proposal for time-of-use customers, arguing a change could lead to 20 percent increases in bills for all-electric customers who do not have natural gas as an option during winter, especially for those in desert regions.
If it would had been approved for time-of-use customers as well, SDG&E estimated time of use summer peak prices would be reduced by roughly 18 percent but winter peak prices would go up about 25 percent. However, summer bills for average customers would decrease about $6.48 per month while increasing $4.12 per month during the winter.
At the public utilities commission’s direction, SDG&E began migrating customers from the tiered rate system to time-of-use last year. However, customers have the ability to opt-out of time-of-use if they prefer.
You can review the San Diego Union Tribune article at:
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