Q1: Why are bills higher than normal?
A: July 1 through the first three weeks of August of 2018 have been the hottest on record for the SDG&E service territory, according to the National Weather Service.
Consecutive heat waves drove during those two months drove up energy use, pushing many customers into a higher-priced tier for energy, which resulted in higher bills.
Additionally, we’re seeing an increase in residential customers hitting the state-mandated High Usage Charge, which went into effect in November 2017. Customers incur this charge when they use four times more energy than the amount allotted to cover basic household energy needs (known as the baseline allowance).
Q2: What is the baseline allowance and how do I find out what mine is?
A: The baseline allowance is a critical part in determining electricity pricing, and ultimately, how much your bill will be each month. It establishes the amount of energy the average household needs to run basic appliances for cooking, lighting, etc.
Your home’s baseline allowance is determined by three factors: 1)The climate zone you live in – coastal, inland, mountain, or desert; 2) The season; during the summer months (June 1 – October 31), the baseline increases as energy demand across the state rises; 3) The type of service – either electric and gas or just electric – at your house.
Visit our baseline allowance webpage to find out what your baseline is. It is also listed on your monthly bill.
Q3: What is the High Usage Charge?
To encourage conservation, the California Public Utilities Commission mandated that a High Usage Charge (HUC) be added to residential pricing plans. HUC, which went into effect in November 2017, applies to residential customers when they use four times more energy than the average amount needed to run a household. This average amount of energy is also known as the baseline allowance, which can vary by climate zone and season.
Q4: What can customers do to lower their bill?
A: Log into My Account or create an online account if you don’t already have one. Within My Account, customers can get a breakdown of their energy use (which appliances use the most energy), find out what their baseline allowance is and sign up for High Usage Charge alerts.
We also have dedicated webpage – sdge.com/summer – that includes low-cost or no-cost tips to beat the heat and cool down your energy bill. For example:
- Adjusting your air conditioner thermostat from 72 to 78 degrees or higher can save up to 12% of your cooling costs
- Cleaning or replacing filters helps your air conditioner run more efficiently.
- Switching from A/C to fans when you can comfortably do so makes a big difference. Using a portable or ceiling fan to circulate air in one room can cost about 4 cents per hour. Cooling your entire house with central A/C can cost about $1 to $2 per hour.
Q5: I’ve heard about Time of Use plans but is that my best option?
A: SDG&E has pricing plan options to give customers more choice and control over their energy use to maximize savings. For example, Time of Use pricing plans offer some immediate benefits over a standard plan. For example:
- No High Usage Charge – Time of use plans do not have high usage charges so if a customer anticipates continuing to use high amounts of energy, they may save each month on one of these plans.
- Simple shifts can equal savings – shifting simple chores like laundry and running your dishwasher to before 4 p.m. or after 9 p.m. can reduce your monthly bill on a time of use plan. Outside of the 4 p.m. to 9 p.m. timeframe, prices are lower which provides a second opportunity to save. On a standard plan, the price is the same every hour of the day.
- Risk-free trial – two of our Time of Use plans come with a risk-free trial period for one year. This means if a customer would have paid less on their non-Time of Use, standard plan, we will credit them the difference.
- Take advantage of “A/C pre-cooling” – take advantage of cheaper prices outside of 4 p.m. to 9 p.m. to pre-cool your home or business, then turn up the thermostat from 4 p.m. to 9 p.m. and you can experience some savings.
Q6: Why are rates higher now than they were before?
A: There are seasonal changes in rates. Demand on the power grid is typically higher in summer months than in winter months, translating into higher-than-normal bills.
Besides seasons, electricity prices are determined by a variety of factors, including how much electricity is being used by homes and businesses; the number and type of customers in a given service area; where the electricity comes from and how it is generated; and the cost to deliver that electricity to every home and business regardless of location.
We have also modernized a lot of our system. More than 60 percent of our power lines are underground. Underground lines are more expensive than overhead lines, but undergrounding improves safety and enhances the visual character of the neighborhoods we serve.
To mitigate the risk of wildfires and respond to the challenges of climate change, we’ve had to make significant investments to make our region safer, such as building America’s largest utility-owned weather station network and having an airtanker stationed year-round in our region for dispatch by CAL FIRE.
Q7: Why are SDG&E per kilowatt hour cost higher than other utilities, such as Southern California Edison (SCE)?
A: There are many reasons that account for differences in pricing among utilities. For one, SDG&E’s customer base is mostly residential and is significantly smaller than Southern California Edison’s (3.6M people vs. 15M+).
SCE has more industrial customers that can absorb more of the costs. There are fixed costs - such as power poles and pipelines to deliver electricity and natural gas. When you have fewer customers to cover these fixed costs, the per kw/h price is higher.
For additional information, please also refer to the answer in the Question 6.
Q8: Is SDG&E price gouging?
A: Higher-than-normal bills this summer are due to a several factors: summer rates are typically higher than winter rates because of higher demand on the grid; a prolonged spell of hot weather has resulted in higher usage and therefore higher bills; some customers are hitting the state-mandated High Usage Charge, which applies to those who use four times more energy than the amount allotted to cover basic household needs. (Please refer to answer in Question 4).
All rates charged by utilities in California are reviewed and approved by the California Public Utilities Commission to ensure the charges are just and reasonable.
Q9: Is SDG&E profiting off of energy sales during the summer when demand is high?
A: Per state law, SDG&E does not profit off the sale of electricity to our customers. The cost of electricity is a direct pass-through to customers’ bills. SDG&E is not legally allowed to markup the cost of electricity.