How Your Bill is Calculated

Managing your energy costs begins with understanding  how your bill is calculated. One of the most important factors that affects your bill is the price you pay for a unit of energy

Units of energy defined

A unit of electricity is called a kilowatt hour (KWh).  A kilowatt-hour is a measure of energy equal to the use of one kilowatt for one hour. You are billed based on how much electricity, in kilowatt hours (kWh), you use each month.

A unit of natural gas is a therm. A therm is a measure of energy equal to 100 cubic feet of natural gas and is used to determine your actual natural gas usage. You are billed based on how much natural gas, in therms, you use each month.

Your bill amount changes with your usage

The energy you use in a month is broken up into usage levels.  As you use energy during the month, you move up from usage level to the next and price you get charged goes up in each level. Usage levels are set by the California Public Utilities Commission (CPUC) and are designed to encourage conservation.

Baseline Allowance

You are allotted a daily baseline allowance and given a set amount of kilowatt hours (kWh) of electricity per day and gas therms per day depending upon your service (electricity only or electricity and gas). This set amount for electricity and set amount for gas is determined by various factors. See Factors Affecting Baseline below.

Once your usage exceeds the baseline allowance of electricity or gas your total electric bill or total gas bill becomes progressively higher.

Where does your energy go?

Ever wonder what the biggest energy users in your home might be--and where your energy-saving efforts might have the most impact in staying within your allotted baseline allowance?

Take our simple survey to find energy and money savings in your home. Based on your results, you can request a free Energy and Water Savings Kit from SDG&E.

The information you provide us will not be shared and is only used to determine more ways for you to save. Actual savings may vary.

Take the Home Energy Survey


Additional information

  • Factors affecting baseline

    Billing Cycle

    Month-to-month your baseline allowance can change due to differences in the number of days in your billing cycle. Your daily baseline allowance is determined by the following:

    Where You Live

    SDG&E’s service territory is divided into four different climate zones: Coastal, Mountain, Inland, and Desert. Each climate zone is assigned different daily baseline allowances.

    The Time of Year

    The daily baseline allowance varies by season. For residential customers, the summer season is defined as May 1 through October 31 and the winter season is defined as November 1 through April 30.

    The Type of Service You Have

    Customers that receive both electric and natural gas service, will have different baseline allowances (basic service baseline allowances) than customers with all electric service (all electric baseline allowances).

  • Natural gas charges

    Natural gas charges are broken down into “Gas Service”, the charge for delivery, and “Gas Energy”, the cost of the commodity. When “Gas Service” and “Gas Energy” are added together, you see your total cost for natural gas.

    “Gas Service” charges show your usage broken down into baseline and non-baseline levels.  Usage within the baseline allowance amount is charged at the lowest rate.

    Delivery charges and commodity price are the two main factors that affect your costs for natural gas. The delivery charge includes the pipes, distribution system, transmission system, construction and cost of building and operating natural gas compressor stations.

    The commodity price is the actual cost for natural gas and this price fluctuates monthly in response to changes in production, imports, inventories and oil prices. The California Public Utilities Commission (CPUC) regulates all rates paid by SDG&E customers.

  • What do costs include?

    Costs of generating electricity

    Electricity can be produced from a variety of sources including power plants fueled by natural gas or nuclear energy, wind or solar farms or hydroelectric sources.  SDG&E generates some electricity itself, but it buys most of it from other producers. 

    Costs of electric and gas transmission and distribution

    This includes the costs involved in getting the electricity or gas from where it is produced to your home or business.

    Costs of energy-efficiency programs and incentives

    These are programs that encourage energy conservation like rebates for efficient appliances and incentives for energy-saving home improvements.   

    Costs of programs designed to help lower-income customers afford their electric and gas service

    These are programs that provide assistance to special income-qualified customers like those on the CARE (California Alternative Rates for Energy) program.   

    Fair rate of return on utility investments

    This fair rate of return is authorized by California state regulators on the investments we make in our energy infrastructure (pipes and wires)

  • Medical needs and your baseline allowance

    If you or someone in your household has a medical need that requires increased energy usage, the Medical Baseline program can save an average of 30% a month.

  • Rates and regulations

    For detailed information about our electric and gas rates, review our tariff filing section.