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Why are SDGE rates higher than government owned utilities in California?

SDGE claim that the reason their rates more expensive than government owned utilities is because regulatory rules don't allow them to buy cheaper coal fired power and also that they are subject to other regulatory restrictions not imposed on government owned utilities.

They also point to the fact that government owned utilities can get cheaper corporate finance as they can issue government backed bonds to raise money.

However, the largest reason { $utility->abbreviation }} rates are so high is that as a private corporation they need to make a return (profit) on the capital value of the asset base they own (the poles and wires around San Diego). Government utilities don't need to make benchmark returns on assets.

Why are SDGE rates higher than the other publicly owned utilities in California?

There are two reasons for this. They have less customers than PG&E and also the average amount of power used by each SDGE customer is less than for the other publicly owned utilities in California. This means they have less kWh's sold from which they can recover their costs for running the network and means their rates per kilowatt hour are higher.


SDGE offer both tiered and time of use rate plans to their residential customers.

A tiered rate plan is a plan where the amount you pay per kWh for electricity increases as the quantity of electricity you use increases. Generally there is an allowance of kWh's (kilowatt hours) per month at a cheaper rate and then use above this allowance is charged at a higher rate. Originally these plans were created to discourage very high energy users, in the interest of conservation of fuel sources and reducing the required investments in power lines and transformers, and also promote energy efficiency in home appliances or HVAC systems.

However, tiered rate plans are being phased out in the investor owned utilities in California and by 2019 both business and residential customers will have to be on a time of use rate plan. As such any forward looking estimates of savings are best done looking at the available time of use rate plans.

SDGE are phasing out tiered plans during 2018 and so there is not much value in explaining these tarrifs in detail.

A time of use electric rate plan is an electricity plan where the amount you are charged per kilowatt hour (kWh) for power is determined by the time of day that you use it.

They typically have peak times of the day with higher rates and an off peak with lower rates.

The new times for peak and off peak are as follows:


New TOU Periods – Effective December 1, 2017

On-Peak 4 p.m. - 9 p.m. daily
Off-Peak All Other Times
Super Off-Peak 12 a.m. - 2 p.m. Weekends and Holidays / 12 a.m. – 6 a.m. Weekdays


Image source: www.sdge.com


New Seasons:

Summer: June 1 – October 31

Winter: November 1 – May 31

What are SDGE's residential time of use plans?

As a residential customer you have three choices of residential time of use rate plans:

  • TOU-DR the general residential time of use plan.
  • TOU-DR-P a time of use rate plan with lower general rates but very high rates on specific days that are advised to you. Effectively this plan rewards you with cheaper power all year if you choose to use less energy on high power demand days but punishes you if you do not indeed use less power on these days.
  • DR-SES a special time of use plan for those that generate their own solar power. The distinguishing features of this plan is that it has more solar friendly peak periods.

With a Time-of-Use rate like DR-SES, the price of electricity varies according to on-peak, semi-peak and off-peak use time periods as seen in the following table:

Summer on-peak 11am - 6pm, Mon - Fri, Except holidays
Summer semi-peak (Except holidays) 6am - 11am and 6pm - 10pm, Mon - Fri
Summer off-peak 10pm - 6am, Mon - Fri and all hours on weekends and holidays
Winter semi-peak 6am - 6pm, Mon - Fri, Except holidays
Winter off-peak 6pm - 6am, Mon - Fri and all hours on weekends and holidays

How do I compare the different SDGE time of use plans to see which one is cheaper?

Rate per kWh TOU-DR TOU-DR-P DR-SES
Peak up to 130% of baseline 0.28995 (4pm-9pm) 0.23901 (4pm to 9 pm) 0.52796 (11 am to 6pm on this plan only)
Peak after 130% of baseline allowance 0.46087 0.4131 0.52796
Semi peak before 130% baseline allowance 0.2288 0.2346 0.25734
Semi peak after 130% of baseline 0.40110 0.40696 0.25734
Off peak before 130% of baseline allowance 0.18391 0.14555 0.23202
Off peak after 130% of baseline 0.35621 0.31785 0.23202

Look at these numbers you might think it is always better to be one TOU-DR-P however if you use more than a minimal amount of power on high use days on the TOU-DR-P plan you can be charged up to $1.15 per kWh for excess power use on those days.

If you think you are the type of person that will take notice when SDGE advise you of a high use day and actually use less power on that day, then you can save quite a bit of money on this plan because the standard rates are around 20% cheaper. However, it is worth remembering that these high use days are usually when it is very hot and so it can be hard to not have air-conditioning during these times. More advanced systems or technologies such as smart thermostats could change all this, by regulating your cooling system so you still get nearly all the comfort but also automatically keeping your energy usage under the thresholds.

Which SDGE residential time of use rate plan works out cheaper over all?

If you cannot install solar, TOU-DR-P will be the cheaper plan provided you can limit your use of power on high use days

For a customer with solar, then the DR-SES plan will be the best because it moves peak hours into the daytime such that more of your excess solar power during the day will attract a credit at the peak rate. However, the rates in general are higher on this plan and so this plan will only work out best for customers with solar panels if the solar system is big enough to account for all of your daytime usage and to additionally export some power to the grid. The idea is that the higher rate you are paid for your power exports will then offset the relatively higher rates at night time.

Another advantage of the DR-SES plan is that because there is no baseline credit the semi-peak and off peak rates are lower for usage above 130% of baseline allowance.

So if you are a relatively high energy using household, a solar system and the DR-SES plan combined can substantially reduce your electricity costs over the long term.

Here is a Link to SolarReviews a website that shows you who are the best rated solar companies in San Diego.

How do I know what my Baseline allowance is?

The Public Utilities Commission has set a regimen that the baseline allowance should be between 60-70% of the usage of the average consumer in each climatic area within the SDGE territory.

For this reason the SDGE territory is divided into zones reflecting the variations in climate across their servie areas. There is a Calculator on the SDGE website that allows you to calculate your baseline allowance.

How do I work out if I am on the cheapest SDGE rate plan for my usage pattern?

To work out the exact amount you can save each month by swapping from one rate plan to another (if any) you need to have data about your usage in both peak and off peak periods.

To do this you need to get hold of your electrical data for the last 12 months in hourly (or more frequent) intervals. This is known as Interval Data and sometimes also called Green Button Data.

 

Interval Data
Green Button data

 

Interval or Green Button data is your electrical usage data for the last 12 months in one hour (or even shorter) intervals. This data is available from your utility provider.

How do I get my interval data for the last 12 months?

This data is available from SDGE. You can ring them and they are required by law to send it to you but you will probably be on hold for a long time and it will probably take forever. There is also a website called UtilityAPI.com that allows you to get this data for $15 (they have an electronic interface to SDGE)

However, if you own your home and it is a single family dwelling then a really good way to get this data for free is to request solar quotes from local solar companies.

Generally solar offers much bigger savings than simply swapping plans (as the plans are designed to give the same overall cost to average consumers regardless of which one you choose), and a solar designer will usually need to get this same interval data anyway to work out what size solar system would minimise your electric bill and to forecast future savings accurately.

Solar installation companies will usually retrieve and analyze your electricity usage interval data for free in the hope of winning your solar business.

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How much can I save per month by swapping to my cheapest available plan?

For most people the amount you can save by swapping plans is relatively minimal, because the electric plans are approved by the Public Utilities Commission (PUC) and the different plans are designed to work out roughly the same in terms of total costs for consumers with average consumption patterns.

In most cases savings will be between $5 - $10 per month, but could be much larger for high energy users, or for homes and businesses with non-typical usage patterns that also install solar panels and then move to the DR-SES rate plan.

This is one reason why most people who own their own homes and have relatively high usage are now looking at solar as the best method to reduce their power bill.

Even moderate electricity consumers with a monthly SDGE bill of only $150 ( with suitable homes) can save $50 or more (even after the solar loan repayment) every month by going solar, and in many cases they can almost eliminate their ongoing power bills after the initial 6 - 8 year payback period.

Find out how to reduce your SDGE electricity bill.