SDG&E’S HIGH-USAGE CHARGES ELIMINATED AFTER PUSHBACK

Move to help customers on tiered rates avoid big leaps in utility bills

More than 300,000 San Diego Gas & Electric customers who are still on tiered pricing plans won’t have to worry about getting stuck paying a “high-usage charge” this summer.

The California Public Utilities Commission on Thursday voted to eliminate the charge, following calls from SDG&E officials who have lobbied the commission to get rid of it after a blazing hot summer in 2018 resulted in skyrocketing bills for some customers living in inland areas who cranked up their air conditioners to get some relief.

“We heard from our customers loud and clear that they felt strongly the high usage charge was punitive and unfair, particularly for those who live in hotter climate zones and by necessity, use more energy for cooling during summer months,” SDG&E’s Chief Customer Officer Scott Crider said in a statement.

The charge had been something to dread for customers on a tiered-rate billing system, in which users pay a flat baseline price for electricity. Once usage exceeds 130 percent of a house

hold’s predetermined monthly allotment, prices go up. An even steeper high-usage charge kicks in when customers used four times more or 400 percent of their baseline.

The utilities commission instituted the charge to send a price signal to residential customers to conserve electricity.

But SDG&E was inundated with complaints in the summer of 2018 after some customers reported their monthly bills shot up about 50 percent.

SDG&E officials went to the public utilities commission, requesting an end to the charge. In June 2019, the commission turned back the request. In May 2020, the commission reduced the charge but did not eliminate it, in an effort to give customers some financial relief in the wake of the financial impacts of the COVID-19 outbreak.

On Thursday, though, the commission concluded the high-usage charge “does not have a substantial impact on the conservation of electricity” and made way for its ouster.

SDG&E officials say they expect the charge to be removed before the weather heats up this summer, pending the filing of what is called an advice letter to the commission and programming SDG&E’s billing system.

It should be noted that a declining number of SDG&E customers are on tiered billing. That’s because at the commission’s behest, investor-owned utilities in California are transitioning customers from tiered rates to “time of use” — a structure in which the price customers pay depends on when they use power. Prices are higher when demand on the grid is greater and electricity costs are higher, such as the peak hours of 4 to 9 p.m.

There is no high-usage charge for customers on time of use plans.

SDG&E began switching customers to time of use in 2019. As of this month, about 312,000, customers are still on tiered pricing plans. Last year, about 25,000 SDG&E customers were impacted by the high-usage charge.