San Diego Gas & Electric has begun the process of implementing a new rate system under which heavy energy users will benefit from lower rates and conservation-minded consumers will see their bills spike.

Approved earlier this year and lambasted by many (including onetime mayoral hopeful and city councilmember David Alvarez, who called the move "clearly another giveaway to SDG&E"), the number of existing rate tiers will shrink this month from four to three. The number of different rates consumers pay, based upon how much they exceed their "baseline" allowance (Tier 1) will further shrink from three to two by next March.

Making Up for the High-Tier Reductions

To make up for the reduced income from high-use consumers, SDG&E has implemented a $10 minimum charge for most customers (low-income households using the CARE discount will pay $5). The CARE discount has also been lowered from 40 percent to 35 percent.

"September is traditionally a hot month, which can mean higher bills because many customers need to use more electricity to stay cool," says Caroline Winn, SDG&E's chief electric delivery officer. "By implementing rate reform now, more of our customers will benefit from lower energy costs as they reach the higher tiers."

More Changes (Charges) Coming

Future changes include the introduction of a "super user" surcharge reintroducing penalties for users who go 400 percent beyond baseline sometime in 2017, and a transitioning of all consumers to "time-of-use" rates by 2019, when the cost of electricity will be constantly variable and ratepayers using energy at times of high demand will be charged a higher rate.

SDG&E says customers will have the option to opt out of the time-of-use rates, but once it gains approval, those not opting to remain in what will then be a two-tier structure will be converted to the new system by default.