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SDG&E Proposal Would Shift Charges Away From Heavy Users
This is a great article we found from last year… SDG&E business as usual!
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SDG&E proposal would shift charges away from heavy users
By Morgan Lee9:17 P.M.FEB. 6, 2014
California utility regulators are rushing to ward off “rate shock” from residential electricity bills before the summer months, when hot weather and power use peak in tandem.
The California Public Utilities Commission is considering a proposal to shift charges away from heavy users of home electricity toward low-use customers. San Diego Gas & Electric, the author of the proposal, says its low-use customers have been paying far less than it costs to serve them.
The changes, if approved, would increase kilowatt-hours charges on everyone’s initial allotment of electricity by an estimated 24 percent come July 1, according to recent filings by SDG&E with the California Public Utilities Commission. The largest home-electricity users would avoid a major bill hike, and could see some reductions.
The proposal is only a prelude to a major restructuring of residential utility bills in early 2015, as mandated by the state legislature last year. Assembly Bill 327, signed by Gov. Jerry Brown in October, allows the utility commission to raise fixed fees to as much as $120 a year and reconfigure the current “tiered” rate structure that steps up charges in four steps according to how much electricity is used by the end of each month.
The current billing system has been a boon to rooftop solar, allowing customers who generate their own electricity to avoid an array of escalating utility costs. Changes would likely reduce the payoff not only for solar but also for home energy-efficiency upgrades.
To make matters even more complicated, the utility commission is gearing up to rewrite the “net metering” provisions for crediting rooftop solar electricity against utility bills, under a 2017 deadline.
New billing proposals by the state’s three big investor-owned electric utilities are likely to be contested vigorously by state and national businesses in the clean-energy sector, including rooftop solar providers backed by Wall Street investors.
The utilities commission is awaiting formal responses from consumer and special interest groups. Long-term billing proposals from the utilities are due at the end of the month.
Without changes to residential rate structures, the utility serving San Diego and southern Orange counties estimates that large users of home electricity would end up being billed nearly 47 cents a kilowatt hour — three times the current base rate — after exceeding typical consumption.
Conservationists like the current system, but politicians have grown wary of a backlash. Revenue growth at SDG&E has continued to outpace inflation under a four-year rate increase in excess of $500 million approved by regulators last year. Additional increases on the order of $200 million to $300 million are expected before summer, a consequence of commodity costs and forecasts.
Charges for basic consumption levels were frozen by the legislature in 2001 (AB 1X) and later limited in 2011 (SB 695) to annual inflation-related increases of 3 percent to 5 percent.
The restrictions combined with steady increasing business expenses have heaped costs disproportionately on heavy consumers of power.
SDG&E would gradually reverse that trend by tying tier 1 and tier 2 rates to an average system rate increase for all customers.
“It’s going to feel perhaps uncomfortable for customers in the lower tiers initially,” said SDG&E spokeswoman Stephanie Donovan. “That’s why we’re trying to do this on a gentle glide path.”
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Tiered Billing System;
Price per kwh increases dramatically in tiers 3 and 4;
Rate Hikes increase by an average of 6% per year.
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