Q&A: Changing Rate Tiers and High Usage Charge

  • By Ron Gales
  • December 21, 2016

Most of Southern California Edison’s residential customers will see one or more changes to their electric bill beginning in January 2017, with a focus on energy conservation.

The number of tiers in SCE’s Standard Residential Rate Plan — which applies to most residential customers — is being modified from three to two tiers. The number of tiers was reduced from four to three in June.

The tiers are being restructured so a portion of the kilowatt-hours previously allocated to Tier 3 will move into Tier 2, which will allow customers additional usage at a lower cost.

Customers will also be subject to a High Usage Charge if their energy usage during a billing cycle greatly exceeds the typical usage of a household in their area.
 

SCE rates tier chart

Here are answers to some common questions:

Why are these changes happening?

California is gradually phasing in reforms to electric rate structures so they more closely align with the actual cost of electric service. The process began in 2013 when the Legislature approved AB 327, allowing the California Public Utilities Commission to reform existing rate structures that had been in place since the 2001 energy crisis.

The ongoing changes in electric service rate structures are also meant to encourage customers to conserve energy.

What is the High Usage Charge? How does it work?

The High Usage Charge is a rate that applies to a customer’s energy use in excess of 400 percent of their baseline allocation. The baseline allocation (which is on the bill statement) reflects the amount of electricity needed to cover an essential portion of energy use, such as lighting, cooking, heating and refrigeration, each billing cycle.

Residential customers who use more than four times the amount of their baseline energy allocation during a billing cycle will trigger this higher rate for all usage beyond the 400 percent mark. This baseline allocation is established by region by the commission and is based on factors such as the climate at a customer’s location, the season (winter or summer) and whether a home is “all electric” or uses both electricity and gas.

Are other California electric utilities adopting the High Usage Charge and fewer residential rate tiers?

Yes, PG&E and SDG&E will implement similar rate changes later in 2017.

If my electricity usage stays the same, will I be paying more with the two-tier structure than I am paying now?

For the average customer on the Standard Residential Plan, the change from three rate tiers to two should have little to no impact on their bill if their pattern of electricity consumption stays the same. Rate increases may still occur, but they will be independent of changes to the tier structure and High Usage Charge.

That said, rates for residential customers will increase by 3.7 percent in January 2017, primarily due to a recent significant rise in natural gas prices. As a result, the average 2017 bill increase for residential customers will be between $3-4 per month.

Does the High Usage Charge and reduction in rate tiers apply to all residential customers?

The changes apply to all SCE residential customers on the Standard Residential Rate Plan (Schedule D). They do not apply to residential customers on Time-of-Use (TOU) rate plans.

Depending on how your household uses energy, a TOU rate plan may be a better option to help you save on your energy bill. You can use SCE’s Residential Rate Comparison tool to compare costs based on your historical energy usage with three of our Time-of-Use (TOU) rate options.

Will these changes impact SCE’s business, commercial or agricultural customers?

​Non-residential accounts will not be affected by these changes.

How will customers be notified of the coming changes?

SCE is reaching out to residential customers in different ways, including email and mail. The company is also providing information through its rate change page and at on.sce.com/highuse.

Will customers who are about to trigger the High Usage Charge receive a warning?

Customers enrolled in Budget Assistant who elect to receive their alerts by email will receive an “early warning” message if their projected bill includes the High Usage Charge. With this early warning, customers will have the ability to take action to try to avoid the charge before it is applied.

Can SCE help me use less energy to avoid triggering the High Usage Charge?

Yes. SCE offers tools to help customers conserve energy and manage their bills, including the Home Energy Advisor tool and the Home Energy Guide. You can also see if you qualify for rebates at on.sce.com/residential. SCE offers Time-of-Use rate options so customers can control when they use electricity and how much.  

What can I do if I’m having difficulty paying my electric bill?

Customers can visit the Help With Your Bill page to find out about:

  • Options for payment arrangements;
  • Eligibility for one-time payment assistance via the Energy Assistance Fund (EAF), or;
  • Qualifying for ongoing bill support via the California Alternate Rates for Energy (CARE), Family Electric Rate Assistance (FERA) or Energy Savings Assistance (ESA) programs.

I’ve heard that installing solar panels can help me save on energy costs. Is that true?

The answer is different for each individual homeowner. Customers can find various resources — including videos and fact sheets — on SCE’s Solar Power At Home page for more information.

If you decide to go solar, SCE is ready and willing to help. SCE has enabled more than 200,000 solar installations across its service area since 1998. In 2015, the Smart Energy Power Alliance named SCE the nation’s No. 1 solar utility.

I live in a hot climate and use my air conditioning a lot during the year. How do these changes affect me?

Residential customers who live in a hot climate zone typically receive a higher baseline allocation than those in cooler climate zones, especially during the summer. So while the 400 percent threshold applies to all Standard Residential Rate Plan (Schedule D) customers, those in the hotter climate zones are able to use a greater amount of kilowatt-hours before triggering the High Usage Charge.  

I have family members who are Medical Baseline customers. How do these changes affect them?

Medical Baseline customers on the Standard Residential Rate Plan (Schedule D) receive an additional 16.5 kilowatt-hours per day (or 495 kilowatt-hours in a 30-day billing cycle) beyond their baseline allocation for the necessary operation of life-support devices and equipment. For these customers, the High Usage Charge will only be applied after using the kilowatt-hours allocated to Tier 1, Medical Baseline and Tier 2.

I own an electric vehicle and charge my EV overnight. How do these changes affect me?

Time-of-Use rates are applied to Electric Vehicle Plans so these changes do not apply. However, electricity used to charge an EV is billed through a separate meter at a different rate than electricity used by the rest of the home. EV customers who are on the Standard Residential Rate Plan (Schedule D) can still trigger the High Usage Charge for their electricity usage at home.

How are the changes impacting solar customers who participate in SCE’s Net Energy Metering program?

If you are a Net Energy Metering customer, the High Usage Charge is only calculated and applied to the net usage for the month, beyond what you generate. These charges will appear on your monthly bill, if incurred, but payment will not be required until your settlement bill.

Are there more changes coming?

The next rate structure change for SCE residential customers is scheduled for no sooner than 2018. At that time, residential customers will be defaulted to a Time-of-Use rate plan, with an option to return to a tiered rate plan.

Currently, SCE is piloting a voluntary TOU rate plan for residential customers. Learn more at rate options.
 

For more information: on.sce.com/ratechange and on.sce.com/highuse.

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