Starting in 2015, SDG&E began consolidating its rate tiers in accordance with the approved structure from the California Public Utilities Commission (CPUC). According to SDG&E, “The consolidation is necessary to make rates more fair and equitable among all residential customers.” These changes mean that electricity rates are going up, even for customers who conserve.

Read on to learn how you could be affected—and what you can do about it.

How SDG&E Changed Its Rates to Make You Pay More

SDG&E used to offer four rate tiers, with customers in higher tiers paying substantially more than those in lower tiers. Last year, the utility transitioned to three tiers, and a few months ago, SDG&E moved to just two tiers.

What does the new two-tier system mean for you? No matter what, you’re probably paying a higher electricity rate than you used to. Everyone’s bill is going up. If you are accustomed to conserving energy, you’ll actually see a larger rate increase because rates are rising even in the lowest tier. It may seem counterintuitive, but SDG&E is essentially penalizing its energy-wise customers even more than those who use a lot of energy.

In the two-tier system, SDG&E has raised its baseline allowance slightly. It’s usually about 400 kilowatt-hours per month. With just two tiers, though, the difference in rates between the first tier and the second tier is more pronounced. Customers in the second tier may now pay up to 50 percent more than those in the first tier. And in 2017, customers who use the most energy will be hit with a “super user” surcharge.

More Changes—And Even Higher Electricity Rates—Are Still to Come

There are even bigger changes on the horizon as SDG&E prepares to roll out time-of-use (TOU) rates in 2019. The utility is testing TOU rates now through a program called “Whenergy.” When TOU goes into full effect, your electricity rates will be determined not only by how much you use, but also by when you use it. If you use energy during peak times, as virtually everyone does, hang on to your checkbook. Your bill is likely to change drastically.

With the Whenergy pilot program, SDG&E has divided the day into off-peak, semi-peak, and on-peak hours. These times will change depending on the season.

During summer (May 1 through October 31), on-peak hours run from 11:00 AM to 6:00 PM. Semi-peak hours are from 6:00 AM to 10:59 AM and again from 6:01 PM to 10:00 PM. Off-peak hours are limited to 10:01 PM until 5:59 AM.

In the winter (November 1 through April 30), on-peak hours run from 5:00 PM to 8:00 PM. Semi-peak hours are from 6:00 AM to 4:59 PM and again from 8:01 PM to 10:00 PM. Off-peak hours remain the same: 10:01 PM until 5:59 AM.

To keep your electricity bill as low as possible, you’ll need to shift your use to semi-peak or off-peak hours. You’ll also need to use energy as efficiently as possible during peak times.

How You Could Be Affected

If you’ve already installed a solar panel system, you shouldn’t be too affected by SDG&E’s changing electricity rates. When TOU is rolled out to all customers, though, you may see an increase. That’s because you’ll be using power during peak hours, when your panels aren’t producing electricity and sending it back to the grid.

If you’re interested in solar, now’s the time to make the switch. While SDG&E’s electricity rate changes mean that savings from solar will lessen a bit, you’ll still save more than you would without solar.

Whether or not you’re already a solar customer, implementing a whole-home energy solution is one of the best ways to drive down your energy bill, especially once TOU goes into effect.

What RC Energy Solutions Can Do for You

RC Energy Solutions can help you make sense of SDG&E’s billing changes. Then we’ll come up with a solution to keep your power bill as low as possible. We do it by accessing your interval data. Basically, that allows us to see how much energy you use throughout the day, in increments of 15 minutes. We usually find that examining usage on an hour-over-hour basis provides the most useful information. Then, we create a customized whole-home energy solution, which might include an upgraded HVAC system, double-pane windows, a solar attic fan, solar panels, or all of the above.

If you’re thinking about solar, we’ll help you find the best billing option possible. New solar customers have the option of staying on SDG&E’s tiered billing for up to five years. In some cases, though, switching to TOU now makes more sense. For example, we recently worked with a customer who could only offset 80 to 85 percent of his usage by switching to solar. His energy needs were such that he couldn’t get to a zero bill. But by putting him on TOU rates now with SDG&E, we were able to save him 98 percent of his costs. In other words, he wasn’t necessarily using less energy, but he was paying less for it under TOU.

Does that sound complicated? Well, it is. The good news is that you don’t have to figure out SDG&E’s complicated electricity rates alone. At RC Energy Solutions, we examine all the options, and we put your best interests first. Contact us for a free in-home consultation to learn more about how you can save.

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