The fixed charge advocated by San Diego Gas & Electric and promoted by the utility-funded Predictable Power Coalition will do little to slow the impact of SDGE’s relentlessly rising rates.
The fixed charge savings for lower-income customers receiving the California Alternate Rates for Energy (CARE) discount will be consumed by SDGE rate increases within about a year. These charges will also be a major blow to most existing rooftop solar owners and potential future rooftop solar adopters, whether they be CARE customers or those in higher income tiers.
The average CARE customer will save about $13 per month in the first year that fixed charges are applied using SDGE’s sample calculation. The California Public Utilities Commission (CPUC) projects that SDGE rates will increase at an average of about 10% per year for years to come. That means the $13 per month in savings the CARE customer sees in Year 1 will be gone by Year 2.
The fixed charge will also undermine the economics of rooftop solar for CARE customers. Currently CARE customers with rooftop solar pay a $5 per month minimum bill. If they have rooftop solar, and that solar covers their entire electricity need, all they pay SDGE is $5 per month, or $60 per year.
But under SDGE’s fixed charge proposal the majority of CARE customers will pay $34 per month, or $408 per year. That is a $348 annual increase in charges the solar CARE customer does not pay now and will not be able to avoid.
The CARE customer, who according to SDGE is the one who benefits with this fixed charge rate structure, gets minor, momentary rate relief and a major barrier — the $408 per year fixed charge — to block any aspiration that CARE customer may have to add rooftop solar.
Predictable Power San Diego coalition partners assert that there will be no new income verification with SDGE’s fixed charge program. That is incorrect. An income verification process is already used by SDGE to verify CARE customer income. However, a process to verify the income of all non-CARE SDGE residential customers, which make up about 75% of SDGE’s residential customers, will begin development as soon as the CPUC approves the fixed rate charge.
Predictable Power San Diego partners also assert that all non-CARE customers will pay a $73 per month fixed charge, and therefore there will be no need to verify income. This is true for the first few years and then false thereafter.
SDGE proposes that the CPUC add a highest tier of $128 per month within 30 months of CPUC approval of the fixed charge. To do this the CPUC must develop an income verification process, to be applied to all non-CARE residential customers, to put each customer in the appropriate tier. Big Brother is coming to town.
Fixed charges encourage customers not to save energy. What is the motivation to save energy if you have to pay the fixed charge anyway? Imposing high fixed charges runs contrary to the state’s commitment to energy efficiency, which goes back to the 1980s, and to the state’s commitment to clean energy, which promotes the installation of rooftop solar.
SDGE is expert at creating the illusion of community support for actions that do not benefit the community. San Diego’s late legendary Bishop George McKinney called out the practice of faith leaders advocating SDGE’s positions to the detriment of underserved communities in a 2018 New York Times article:
Bishop McKinney, pastor of St. Stephen’s Cathedral Church of God in Christ here for the last 55 years, said he believed that those attacking the (community choice energy) program, including fellow African-American clergy members, were doing so only because of financial support from the utility company.
“I think that the inner-city residents are being taken advantage of,” the 85-year-old bishop said. “The cost of energy now is escalating in the community. There has to be someone who is willing to speak truth to power.”
A fundamental problem for SDGE is that its own customers do not trust its motives or statements. When it comes straight from SDGE, customers take it with a large grain of salt. It is therefore crucial in the hearts-and-minds campaign for SDGE to have surrogates the community might consider credible making the claim.
The Predictable Power Coalition is an advocacy coalition that is bought and paid for by SDGE. Sixteen of the twenty non-profit organizations in the Predictable Power Coalition collectively received more than $500,000 in contributions from SDGE in 2021-2022.
The fixed charges proposed by SDGE will provide only slight, short-term relief for lower-income customers. These charges will be a huge step backward for energy conservation and climate action if they are approved by the CPUC. There is still time to ask California legislators to repeal the statute.
These endless profit-driven shenanigans by SDGE are the reason we launched the Power San Diego ballot initiative campaign to replace SDGE with a not-for-profit electric distribution utility under local control. It is time for San Diegans to craft our electricity future.
Bill Powers is a professional engineer, expert witness in CPUC proceedings, and chair of the Power San Diego public power ballot initiative campaign.
