San Diego Gas & Electric has asked the state to approve a major reform of electric rates that the utility says will lower costs for most low- and moderate-income customers and prepare for phasing out natural gas appliances and gasoline-powered vehicles.
SDG&E joined Southern California Edison and Pacific Gas & Electric in a filing late Friday before the Public Utilities Commission that seeks approval of new flat-rate pricing for delivery and lower rates per kilowatt-hour used.
“We have listened to and heard from our customers that fundamental change is needed to provide bill relief,” said Caroline Winn, CEO of the San Diego utility. “When we were putting together the reform proposal, front and center in our mind were customers who live paycheck to paycheck, who struggle to pay for essentials such as, energy, housing and food.”
SDG&E estimates that the average low-income customer could save as much as $300 a year under the new rate plan.
Scott Crider, senior vice president of external and operations support, said the filing is in part a response to last year’s Assembly Bill 205, which sought to make electric prices more equitable, and stressed that the plan isn’t a rate increase.
“We’re not going to make one penny more in profit as a result,” he said.
SDG&E’s plan calls for four flat-rate tiers based on household income to cover the cost of transformers, transmission lines, billing and customer service. The proposed tiers are:
- Under $28,000 income — $24 per month
- $28,000 to $69,000 income — $34 per month
- $69,000 to $180,000 income –$73 per month
- Over $180,000 income — $128 per month
Customers would pay the flat rate plus an average of 27 cents per kilowatt-hour of electricity used, compared to the current average of 47 cents per KWh.
The utility said a middle-income customer who currently pays $188 for 400 kilowatt hours at 47 cents per KWh would instead pay a fixed price of $73 plus $108 for the actual electricity used at 27 cents per KWh, saving $7 per month.
A middle-income customer using 600 kilowatt hours would see a bigger decrease, from the current $282 to $235.
The actual rate paid per kilowatt hour would vary based on whether the power is from SDG&E or one of the community choice aggregations. “We want the CCAs to grow,” said Crider.
SDG&E expects most low- and middle-income customers to save under the plan, with higher income customers benefitting as they transition to all-electric homes and cars.
Crider said the proposed rate structure would be simpler, more transparent and more predictable for residential customers than the current system.
He said SDG&E would not ask customers for information about their income, but instead rely on the state of California to provide classification.
Utility officials also said customers who have installed solar panels would continue to benefit financially and pay lower bills than if they did not have solar.
State law requires the Public Utilities Commission to adopt a new electric rate structure no later than July 1, 2024.