If you inspect your monthly bill from San Diego Gas & Electric, you’ve probably noticed that rates are more expensive in the summer months than in winter.
But on Monday, SDG&E officials filed a request with the California Public Utilities Commission — the organization that regulates the state’s big three investor-owned utilities — to allow the power company to eliminate seasonal pricing to help curb sudden spikes in customers’ bills during the hottest summer months.
SDG&E said the proposal would help level out fluctuations but acknowledged it would not result in overall savings during the course of the calendar year.
The company estimated typical residential customers using about 500 kilowatt-hours of electricity in a month would see a reduction of about $7 per month during the five summer months — which SDG&E defines as June 1 through Oct. 31 — but they would pay an average of about $6 more per month during the seven designated winter months of Nov. 1 through May 31.
“At the end of the year, the annual customer bill will be about the same,” said SDG&E spokesman Wes Jones. “But we definitely hear more from our customers in the summertime in terms of their bills being higher so this is an effort to help alleviate some of those high bill spikes in the summertime.”
Since demand on the power grid is greater during hot summer months, rates are higher and that translates to more expensive bills as customers turn up their air conditioners.
The public utilities commission employs the summer/winter rate structure because it wants to send price signals to energy users to shift their power use from peak hours (4 p.m. to 9 p.m.) to off-peak hours.
For example, under SDG&E’s default time-of-use plan, customers paid 26 cents per kilowatt-hour during the winter months for electricity during peak periods when demand on the state’s electrical grid was at its highest. But in the summer, the rate jumps to 46 cents per kilowatt-hour.
If approved by the Public Utilities Commission, the proposal would affect the estimated 1. 2 million residential customers in SDG&E’s service territory. Commercial customers would not be impacted.
The Utility Reform Network, a consumer advocacy group based in San Francisco, has described SDG&E’s rates as “unbearably high” but said it liked the proposal.
“Bills will be less volatile, but customers will ultimately pay the same amount to SDG&E,” said TURN spokeswoman Mindy Spatt.
This is the second request SDG&E has made to the commission after the power company was inundated with complaints from some customers who saw their bills soar during the sweltering summer of 2018.
Part of the spike was due to a “high usage charge” the commission had instituted in the fall of 2017. Applied to customers who operate under a tiered-rate billing system, the charge essentially doubles the baseline price per kilowatt-hour when a customer’s use exceeds more than four times their predetermined monthly allotment of electricity.
SDG&E estimated about 90,000 customers got hit with the high usage charge last summer. One Fallbrook ratepayer told the Union-Tribune her bill jumped nearly 50 percent.
SDG&E filed an appeal to the utilities commission, asking it to suspend the charge.
But the CPUC turned down the request in June, citing a host of reasons that included doubts that suspending the charge would make a noticeable difference. In addition, the high usage charge does not apply to time-of-use billing and SDG&E, at the commission’s direction, is rapidly transitioning tens of thousands of its customers from tiered rates to time-of-use.
At the time, TURN suggested eliminating seasonal pricing.
According to state law, investor-owned utilities like SDG&E cannot make money when customers use more gas or electricity. Introduced in 1982, sales are “decoupled” from profits and the cost of electricity is a pass-through to customers’ bills. Under decoupling, utilities collect money based on a predetermined revenue requirement overseen by the CPUC, which is litigated in each utility’s general rate case and other regulatory proceedings.