Understanding Rates

The electricity you use in a month is broken up into tiers. It may be helpful to think of tiers as usage levels. As you use electricity during the month, you move up from one tier or usage level to the next and the price you get charged goes up in each tier.


The California Public Utilities Commission (CPUC) sets a monthly “baseline” level for residential customers. This baseline represents how much electricity a customer would need for basic living, for example, heating, cooking, lighting, refrigeration, etc.

When a customer uses more electricity above the baseline amount, the price of electricity goes up.

The CPUC has set a system that the more you use, the more you pay.

Here’s how the CPUC has set SDG&E’s two-tier baseline levels:

two tier rate reform graph

As part of California's continued efforts to encourage people to save energy, a new state-mandated High Usage Charge goes into effect on November 1, 2017. Learn more here.

Coming up with your baseline

There are three main factors that affect your electric rates:

  1. SDG&E’s service territory is divided into four different climate zones

    Each climate zone is assigned different daily baseline allowances. Baseline allowances are set between 50%-60% of the electricity the average residential customer uses in each territory.

  2. The daily baseline allowance varies by season for residential customers

  3. Customers who 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).