San Diego Gas and Electric (SDG&E) proposes a 28% rate hike over four years | Solar.com

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San Diego Gas and Electric (SDG&E) proposes a 28% rate hike over four years


San Diego and Southern Orange County energy provider, San Diego Gas and Electric (SDG&E), is proposing a 28% rate hike over four years. The biggest increase of 11% in 2019 would cost the average San Diego customer an additional $13.99 on his monthly utility bill. The California Public Utilities Commission (CPUC) will hold several hearings before making its ultimate decision. CPUC could vote to approve SDGE rate hike request, reject it or set a smaller increase for SDGE.

Wes Jones, SDG&E spokesperson told 10News “We’re committed to delivering clean, safe, and reliable energy that every family and business in the region deserve and sometimes that requires modernizing and upgrading our infrastructure to do so.”

But many San Diegans are not happy with SDG&E’s rate hike proposal and they are hoping CPUC would not approve this.  Before looking at the details of the rate hikes in the next four years, let’s see SDGE’s historical rates to better understand the steady increase over the years.

What’s our main take?  With the 30% Federal Solar Tax Credit also stepping down in 2019, this is a good time to switch to solar to maximize your savings.

SDGE Historical Electricity Rates

Looking at the SDGE electricity rates from 2009 to 2019, it is clear that the prices have been rising steadily over the past 10 years. Over the past 3 years, electricity rates have increased by 10% and you can expect the rates to continue to increase in the years to come.

2009 – 2015: 4 – Tier Baseline Pricing During 2009 -2015, SDGE administered four billing tiers for summer and winter.

  • Tier 1 – Baseline Energy
  • Tier 2 – 101% to 130% of Baseline
  • Tier 3 – 131% to 200% of Baseline
  • Tier 4 – above 200% of Baseline

2015 – 2019: 3 – Tier Baseline Pricing During 2015 – 2019, SDGE reduced from four pricing tiers to three by combining tiers to create a two-tier system and added a high usage charge for consumption above 400% of baseline.

  • Tier 1 – 130% of Baseline
  • Tier 2 – 130% to 400% of Baseline
  • Tier 3 – above 400% of Baseline

When calculated, summer prices have seen a 74% average increase with prices starting from $0.23 and ending at $0.40. Also, winter prices have seen a 68% increase with prices starting from $0.22 and ending at $0.37 before implementing Time Of Use (TOU) rate plans.

SDGE Time Of Use Plan

Starting in March 2019, all SGDE customers were transitioned to Time Of Use (TOU) plans and the customers were charged less for energy used during times of low demand (and when renewable energy, such as solar power, was abundant) and charged more during times of high demand in the evenings.

Time Of Use plan is an energy pricing plan where customers are billed based on WHEN they consume energy. By shifting your electricity usage to times when costs are less and demand is down, you can lower your bill. However, this does involve purchasing “smart” devices or energy storage systems or changing your usage behavior, to switch your electricity consumption to those “off-peak” times.

For many customers who return from work between 4 and 9 PM, it’s hard to avoid consuming power during the expensive “on-peak” time.

SDGE offers two different TOU pricing plans for its customers – TOU-DR1 and TOU-DR2. Let us look into the details of both these TOU pricing plans.

SDGE Time-of-Use (TOU-DR1)

Under TOU-DR1, there are three different pricing categories – On-Peak, Off-Peak, and Super Off-Peak. Also, Off-Peak and Super Off-Peak hours vary by weekdays, weekends and holidays.

 

Name Timings
On-Peak 4 p.m to 9 p.m
Off-Peak 6 a.m. – 4 p.m. &  9 p.m. – 12 a.m.
Super Off-Peak 12 a.m. – 6 a.m. & 10 a.m – 2 p.m.

SDGE Time-of-Use (TOU-DR2)

Under TOU-DR2, there are two pricing categories – On-Peak and Off-Peak. In TOU-DR2 plan, the pricing schedule is the same throughout the week.

 

Name Timings
On-Peak 4 p.m to 9 p.m
Off-Peak 12 a.m. – 4 p.m. & 9 p.m. – 12 a.m.

SDGE Time-of-Use Summer and Winter Pricing:

FUTURE SDGE RATE HIKES

SDGE recently proposed a 28% rate hike over the next 4 years. The biggest increase of 11% would be happening in 2019. In 2020, rates are expected to increase by 6.9%, 5.1% in 2021, and 4.9% in 2022.

SDGE states the reasons behind increasing rates is to enhance safety and reliability and to manage risks that could impact their employees, customers, and/or system.

But, a total rate increase of 28% over the next four years is not great news for residential customers. SDG&E operates in a tiered structure and the users in the highest tier could see their electric bills double.

When is better to go solar than now! Once your loan is cleared, you will get free electricity for the rest of the life of your system! Solar experts at Solar.com will help you to understand your savings with solar.

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