The price of many things has increased over the past few years and energy is no exception. With a recent California Public Utilities Commission (CPUC) decision, energy costs for most businesses will be going up. We want to help you understand why costs are increasing, as well as steps you can take to manage your use and help lower your costs.
Why Rates Are Changing
This is what’s happening with energy rates and the combination of factors that are contributing to higher costs.
A smart energy network - We are upgrading and enhancing the electrical system to take advantage of new technologies that will provide greater reliability, safety and security for the power grid, more choices for customers and save energy in the long run. These infrastructure costs are incorporated into the “delivery” component of your rate.
Environmental change - Federal and state policies in California are moving us toward a cleaner environment and a more sustainable future. We are committed to delivering clean, renewable energy to our customers. This commitment to a green, low-carbon future carries a higher cost than traditional energy sources. Since the cost of the electric commodity that we purchase is directly passed through to customers, the increased costs of clean, renewable power are causing this portion of the rate to increase.
Delay of SDG&E’s annual operating budget - The California Public Utilities Commission’s decision that sets our multi-year operating budget was delayed and did not occur as expected in 2012. Instead, it was issued in the second quarter this year. This delay means we will have to start collecting the approved increase for both 2012 and 2013 this year. In other words, the increase essentially jumps rates from 2011 to 2013 levels.
The first part of understanding rates is knowing what makes up your electric bill. Most SDG&E business customers fall into one of three main billing rates for electricity, based on the amount of electricity used, and in the case of many larger customers, demand for electricity.
How can I tell what rate my business is on? - If you look at your SDG&E bill, under the “Electric Service” section you’ll see what rate your business is on.
Understanding the A-Rate - If you’re a low energy use business, you’re likely on the “A” rate - a flat rate for businesses that use less than 12,000 kWh per month.
Understanding the Pumping-Agricultural (PA) Rate - If you’re an agricultural business, you’re likely on the “PA” rate - a flat rate for agricultural businesses using up to 300,000 kWh per month.
Understanding the Time-of-Use (AL-TOU) Rate - If your business is regularly using more than 12,000 kWh per month, you’re likely on the Time of Use “AL-TOU” rate.
What goes into energy rates?
Electricity rates have a commodity component and a delivery component. We bill for the cost of the electricity (commodity) itself, plus the infrastructure (wires, transformers, power plants and other things) that deliver the energy to you. There are also charges that include taxes, fees, and public programs.
SDG&E does not make money on the commodity cost of the energy, only on the delivery infrastructure we build in addition to other operating costs to deliver the energy. To learn more about how SDG&E makes money, watch this video.
We want to work with you to save energy. If you are one of the SDG&E customers impacted by the current rate increase or you just want to find some ways to save, we offer a variety of programs, services and assistance to help you manage your energy costs.
Download our brochure with the low-cost and no-cost ways you can save energy at your business.
If you haven’t already, signup for My Account to track your energy use with our online energy management tool. To use it, sign into My Account on sdge.com, then click the “My Energy” tab.
Take an energy assessment. We’ll come to your place of business to identify equipment that can be replaced to save energy and money. Once the best places to save are identified, you may be eligible for technologies like lighting and refrigeration upgrades, at no cost to you.
We can help you make an investment for longer-term energy-saving benefits through rebates and financial incentives that help offset the costs of replacing or retrofitting most of the energy using equipment at your business.
To find out more about ways to save in a particular industry, visit our industry resource pages for tools, tips and services designed to help businesses of all types and sizes.
If at any time you need help with your bill, we also offer a variety of convenient and secure payment options and assistance. And consider our Level Pay program to even out your bill payment from month-to month.
The Long-Term Solution
California has experienced monumental changes in our energy environment – where we get electricity and how we pay for it – but the basic structure of electric rates hasn’t changed. The long-term solution to combat rising rates will depend on statewide rate reform, while still maintaining our environmental and renewable goals.
For more information on rates, the best ways to save energy and the services we have to assist you, call