Blog

Photo of Adam Gerza, Sullivan Solar Power's Director of Government Affairs

Adam Gerza

Director of Government Affairs

California Solar Energy Industries Association (CALSEIA) Board Member

Summer 2014 - Residential Rate Changes

Adam Gerza

06/24/14

Last week on June 19th, the California Public Utilities Commission (CPUC) approved and finalized the latest round of residential rate changes for all three investor-owned utilities. We wanted to make both existing and future potential customers aware of these upcoming changes, as they are scheduled to become effective within the next month.

 

San Diego Gas & Electric (SDG&E): the residential class average rate will increase 13% from $0.206/kwh to $0.233/kwh. All four tiers will see an increase, with the majority of the increases coming in tiers 1 and 2.

 

SDG&E, non-CARE rates (cents per kWh):

Tier % of Baseline Current rates -
June 2014
New rates -
July 2014
% Increase
1 100% BL 15.4 17.3 12.3%
2 101 - 130% BL 17.8 20.4 14.6%
3 131 - 200% BL 35.7 37.7 5.6%
4 >200% BL 37.7 39.7 5.3%
Residential Class Average Rate: 20.6 23.3 13.1% 

 

Southern California Edison (SCE): the residential class average rate will increase 10% from $0.172/kwh to $0.189/kwh. Tiers 1 and 2 will see large increases, while tiers 3 and 4 will see decreases, versus current rates.

 

SCE, non-CARE rates (cents per kWh):

Tier % of Baseline Current rates -
June 2014
New rates -
July 2014
% Increase
1 100% BL 13.2 14.9 12.2%
2 101 - 130% BL 16.5 19.3 17.2%
3 131 - 200% BL 31.8 28.1 -11.6%
4 >200% BL 34.8 32.1 -7.8%
Residential Class Average Rate: 17.2 18.9 9.9%

 

How Will These Changes Affect Me?

All residential customers will obviously feel these changes. For solar customers specifically: when the 'class average rate' increases the value proposition of going solar improves, meaning the economics become more attractive. This applies to both existing solar customers and potential customers considering going solar. The actual bill impact for each customer will be different, because of the changing tier structure. The calculated energy savings from a unique solar project will depend on how much gross energy is consumed, and how much the solar system offsets. The fact that tiers 1 and 2 are increasing the most on a percentage basis, means that low usage customers will be better candidates for solar.

 

Policy Background:

Generally speaking, there are three primary reasons why electric utility rates change: (1) the utilities cost of buying or generating power changes, which gets passed on to the customer, (2) the utility makes infrastructure investments, which get passed on to the customer, (3) rate design changes are made in order to more equitably recover costs among customers. These upcoming "summer 2014" rate changes include elements of all three above stated reasons.

 

Flatter rate design, meaning a reduced differential between the high and low tiers, is a result of rate reform enabled by Assembly Bill (AB) 327. AB 327, signed into law by Governor Brown last October, removed the rate caps on tiers 1 and 2, and directed the CPUC to redesign residential rates to more equitably distribute and recover costs among customers. These "summer 2014" changes are the first round of AB 327 rate reforms, which will continue to be phased in through 2018. It is important to note that these recently approved changes are much less severe (i.e. less flat) than the original proposals all three investor-owned utilities originally submitted for summer 2014. The CPUC rejected the IOU's earlier proposals, stating that "interim rate proposals must stabilize and rebalance tiered rates through a reasonable phase-in schedule relative to rates in effect prior to January 1, 2014, and consistent with statutory requirements that differentials between tiers should be gradual, that rates not unreasonably impair incentives for conservation and energy efficiency, and that rates not overburden low-income customers." It is expected that AB 327 rate reform will continue to make residential rates flatter, which I will discuss in more detail in a later blog.

Comments

There are no comments for this item.

Post a Comment

(will not be shown)

Get Pricing

VIEW OUR 3,500+ INSTALLATIONS

WHY SULLIVAN SOLAR POWER?

CUSTOMER TESTIMONIALS

  • Our experience was wonderful. They made sure we were well informed and were never pushy for the sale.

    - C Paulsen
  • Very professional, nonintrusive to my home. Worked around my schedule, EASY to work with, no misleading information.

    - D Acosta
  • With no money out of pocket, we now have become part of the solution to our country's energy problem.

    - P Gable
  • Sullivan took my $700 SDG&E bill to 29 cents! I think that says it all.

    - J Hemmi
  • If I knew it was going to be so simple and painless I would have gone solar years ago.

    - D Bajek
  • Everyone worked on my home as if it was their own.

    - D Navarro
  • Sullivan, by far, provided the best system value and the best long term opportunity to save money through solar power.

    - K Hord
  • This is a no-brainer in sunny San Diego. Very easy process. I helped the environment, fixed my electric bills and saved money too!

    - C Young
  • First rate.

    - A Wilson
  • I love watching my electric meter go backwards. Thank you Sullivan!

    - J Sanders
  • Outstanding.

    - B Maxon
  • There are so many options in the growing solar market and if we had to do it all over again, we would choose Sullivan Solar Power.

    - C Minegar
  • Sullivan was the best priced of four different contractors and was the most professional and prepared.

    - K Allin
  • Sullivan Solar Power is the one solar installer I trusted to do the job properly the first time.

    - J Conlin
  • All I can say is - excellent work delivered by a professional team.

    - L McJannet
  • We are totally happy to be doing our part to save the planet and save money.

    - A Gilleran
  • We recieved quotes from 4 companies and Sullivan was by far the most professional in their proposals and also most accurate in their production estimated by far.

    - M Rupe
  • Sullivan Solar Power proved to be an excellent choice after researching solar contractors; they were knowledgeable, professional, courteous, and accurate with their estimate.

    - J Coppola
  • The planning of our system by Sullivan, dealing with the city on approvals, installation and time to energy production was perfect. All expectations were exceeded.

    - V Lauderdale
  • The sales was professional and installation was professional. I loved the products, other companies wanted to use Chinese parts, not you. Thank you so much.

    - D Brown
  • From the beginning to end your team did an outstanding job. Thank you and God bless you all.

    - L Eddingfield
  • This has been one of the best purchasing (leasing) experiences I have had in years. The system is top grade and so were the people. Customer service was unparalleled.

    - Q Yates
  • Any chance of getting the system to generate power at night? Just kidding! It’s a hoot to watch the meter spin backwards :)

    - R Oepicks
  • Delivered what they promised, on time.

    - M Wahl
  • From the moment I called their offices to after the installation follow up has been a pleasure having Sullivan move me into the Solar age!

    - S Dabiri
  • I've been a contractor for 37 years and I know when a company is doing it right. Sullivan did it right.

    - G Smith
  • Pushing a little bit of our beautiful, plentiful San Diego sun into the grid should be as easy as going to the beach, and it was with Sullivan Solar.

    - H Richter
  • Excellent! Provides 110% customer satisfaction. Thank you for going above and beyond to accomidate our needs; very appreciated.

    - A Rorstad
  • The team was the most knowledgeable and professional of the companies we interviewed.

    - J Albarella
  • Absolutely outstanding!!!

    - F Fair
  • There is a reason why they are the leader- seamless installation and integration. All my questions were answered.

    - L Wilton
  • We would highly recommend Sullivan to our friends as they did an amazing and professional job.

    - J Jul
  • Sullivan Solar made our experience in going solar worry free.

    - J Barcellona