In a largely unexpected announcement, the California Public Utilities Commission (CPUC) announced that new utility rate increases, as a provision of , which was passed in June of 2022, will go into effect in January of 2024. This comes on top of recent rate hikes by SDG&E in January of this year and rate increases in 2022. This bill was apparently voted on during the legislative session’s last day. It authorizes investor-owned utility companies (IOU), like Sempra/ San Diego Gas & Electric (SDG&E), Pacific Gas & Electric, and Southern California Edison, to start charging a flat rate to their customers, regardless of how much electricity they actually use. The rate is set to be graduated, with higher fees for wealthier customers and lower flat fees for lower-income customers, according to a recent filing by SDG&E.
The CPUC announced that it would begin collecting a flat rate on every monthly utility bill in the state. Sempra Energy, which owns SDG&E and the Southern California Gas Company (SCG), was embroiled in controversy when its natural gas customers saw their bills increase drastically at the beginning of 2023, sometimes doubling without warning or notice. Sempra blamed it on high natural gas prices. California State regulators launched an investigation into the radical rate hikes. California’s governor, Gavin Newsome, pushed through and signed a that would penalize utility companies’ excessive profits.
On April 15, 2023, the rules that govern Net Energy Metering (NEM) will change. NEM is how a customer with a solar system on their property balances the difference between how much energy their solar system feeds into the electric grid (which is sold to other customers at the retail price) and how much electricity the solar customer uses from the IOU when the solar system is not generating, like at night. The benefits of having solar will decrease substantially when SDG&E reduces the value of the electricity it buys from solar customers, while maintaining the high rates they charge all customers when they use the electricity produced by SDG&E.
There are two divisive issues involved in these changes to how energy is produced and consumed in San Diego and Southern California.
The first is the question of equity. Some claim that these changes will benefit lower-income and middle-income households because higher-income customers will pay a higher flat fee while lower-income customers will pay a lower flat fee. However, any increase is an increase. Lower-income customers may not pay as much more as higher income customers, but they will still be paying more than they are paying now. So what SDG&E and the CPUC are saying is that the rates for everyone will go up, but the rates for higher-income clients will increase more. Low-income customers, who are already struggling to pay what are sometimes the highest energy rates in the country, will still see an increase in their utility bills. It is difficult to see how that will benefit low-income utility customers.
The second issue is the disparity between solar customers and non-solar customers. San Diego County has more than 100,000 solar systems generating electricity during the daylight hours. Almost all of these solar systems were paid for by someone other than SDG&E or SDG&E’s non-solar customers. This is electricity generating infrastructure. If Sempra/SDG&E had built this infrastructure, the cost of it would be on every SDG&E bill. People who paid for their own electricity generators (solar systems) are now generating electricity for everyone else for free. In other words, if you didn’t buy, lease, or otherwise pay for a solar system, you are paying SDG&E for electricity that was generated for free to SDG&E customers. It was already paid for before it hit the grid.
If Sempra/SDG&E had spent a billion dollars (or more) to generate the electricity that all the solar systems generate, that cost would be on your bill. It isn’t. You would be getting the benefit of the solar-generated electricity for free, but SDG&E is actually charging you for it. Think on that for a minute.
People who bought solar systems have already paid for the electricity that their solar systems generate. Many, if not most, of the solar customers generate more electricity that they use. The addition of a flat fee is a way of charging solar-generating customers for the electricity they generate, that they have already paid for, all over again.
Sempra/SDG&E and the CPUC need to simply lower the bills of lower and middle-income customers. Charging them a flat fee will not lower their bills or make electricity for your entertainment system and gas for your hot water heater less expensive. SDG&E and their customers might also want to show more appreciation for the solar customers who are feeding pre-paid electricity to the grid for everyone to use. You’re only paying for it (again) because SDG&E makes you.
Government of the people should overrule the power of corporations, and economic self-determination should take precedence over monopolies.
