San Diego Gas & Electric makes case for new rate structure to Del Mar City Council

San Diego Gas & Electric wants to change the way it calculates its customers’ bills.

While San Diegans had an opportunity to weigh in on the utility company’s proposal during California Public Utilities Commission hearings last week, SDG&E representatives presented their proposal to the Del Mar City Council.

The more energy that customers use, the more they pay. But because there are different rates under the company’s four-tier system, SDG&E representatives argued the structure actually creates inequity.

“The structure was incredibly well-intentioned,” said Warren Ruis, public affairs manager with SDG&E. “It was designed to have large homes and big users pay more for energy, while smaller homes paid a subsidized rate because they were supposed to use less energy. Things didn’t actually work out as planned.”

Rates for lower-use customers were essentially frozen for more than a decade, Ruis said, so the difference in the cost per kilowatt hour between the lowest and highest tiers has skyrocketed.

“What this means is that a family of three or four on the coast who can crack their windows open are being subsidized by a family of five or six in Vista, the South Bay or East County who have to run their air conditioners as a matter of survival,” he said. “It’s a fairness issue we’re attempting to fix — all of California is attempting to fix — with rate reform.”

SDG&E’s rate restructuring plan returns fairness to the system, Ruis said.

Under the proposal, customers would pay a flat monthly fee for grid maintenance.

In addition to that fee, the utility is looking at having two rate tiers that are only 20 percent apart. Now, the top tier costs more than double the rate of the bottom tier, Ruis said.

The SDG&E plan would also shift customers gradually toward time-based electricity prices.

“There are some strong inequalities and unfairness in the existing situation,” Councilman Terry Sinnott said. “Based on the legislative bill, there needs to be a fresh look at it.”

Nevertheless, the Del Mar City Council decided it was too early to take a position on the utility company’s proposed rate structure.

“I think the public is used to four tiers,” said Councilwoman Sherryl Parks. “I think it’s a shame to move away from those four tiers. They’re clearly a teaching tool, and people use them.”

Supporters of solar power have argued that the flat fee and time-based electricity prices actually discourage photovoltaic systems.

Councilman Don Mosier said the proposed rate structure fails to incentivize energy conservation and discourages solar installation.

“I have some concerns about the proposed rate structure,” he said. “All the major utilities have similar plans. Even though San Diego is unique and SDG&E is probably the most forward-looking of the utilities in the state, their plan doesn’t look that much different than SCE (Southern California Edison) or Pacific Gas & Electric.

“I think there are some problems.”

The Public Utilities Commission is continuing to hold hearings throughout the state. A decision on the proposals is not expected until sometime next year.

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