Understand your Electric Bill
The two tariffs applicable to reading your Residential SDG&E bill are the Domestic Residential Tariff and Electric Energy Commodity Charge.
*Line item components updated 9/21/2011.
The first part of the bill is composed of the Residential Tariff noted above.
Total Usage: This amount, listed in kilowatt hours (kWh), shows how much electricity your meter registered for the billing cycle. A rough average of a single family San Diego home is about 624 kWh per month, according to information from the California Energy Commission.
Baseline Allowance: This allowance is the threshold amount of energy that is billed at a lower rate than the non-baseline amount. Oftentimes, a residential user will have 249 kWh as a baseline allowance. Any electricity consumption above this threshold will be billed at a higher, non-baseline rate per kWh. The Baseline Allowance is supposed to meet 50 to 60% of your home's electricity consumption. The Baseline Allowance is determined by four things: The climate zone in which the account is located, whether the home is all-electric or uses both Natural Gas and electricity (see page two), number of days in the billing cycle, and whether it is summer or winter.
You may be eligible for an increased baseline allowance if you or someone in your home uses a medical device that runs on electricity. For m information about the Medical Baseline Allowance.
Baseline Usage: If your total usage is greater than the baseline allowance, your baseline usage will be the baseline allowance; any remainder will be your non-baseline usage. If your total usage is less than the baseline allowance, your baseline usage will be your total usage and you will have no residual usage billed at the higher, non-baseline rate.
If total usage > baseline usage, then baseline usage = baseline allowance
If total usage < baseline allowance, then baseline usage = total usage
In this example, the baseline usage is 249 kWh and the non-baseline usage is 500 - 249 or 251 kWh
The overall rate that you pay for the baseline usage is listed on your bill. For instance, your bill may look like this:
Baseline Usage 249 kWh @ $.06326
This indicates how much you were paying per kilowatt hour (about 6.3¢) for your baseline allowance. This rate is determined from the line items below the Total Electric Charges, such as Transmission, Distribution, etc. to determine the Baseline Usage Rate per kWh. In this instance, the total charges for Baseline Usage are $15.75.
Non-Baseline Usage: If your total usage is greater than the baseline allowance, any additional amount is considered to be your Non-Baseline Usage. This is billed at a higher rate than the Baseline Usage. Your bill may look something like this:
Non-Baseline Usage 251 kWh @ $.08781
This indicates how much you were paying per kilowatt hour (about 8.8¢) for your non-baseline usage. This rate is also determined from the line items below the Total Electric Charges, such as Transmission, Distribution, etc. The slight difference between the Baseline and Non-Baseline charges is due to an increase in the Distribution and Transmission charges for Non-Baseline kilowatt-hours. In this instance, the total charges for Non-Baseline Usage are $22.04.
So, the total bill is calculated as $15.75 + $22.04, or $37.79, plus the actual cost of electricity, which is listed as the Electric Energy Charge minus the Electric Energy Rate Adjustment. If you take the Energy Charge, subtract the Rate Adjustment and then divide this by your total kWh, you should find that you are being charged $.065 (6.5¢) for the market price, which is the current capped rate for SDG&E customers. This price is an average of the market value of electricity that the State's Dept. of Water Resources is currently purchasing on behalf of consumers for your billing cycle. Yes, this is a big chunk of change. In fact, if you meet certain low-income guidelines, you can qualify for the California Alternate Rates for Electricity, or CARE Program.
Line Item Components
Electric Energy: This is the actual price you are charged for electricity. In California, the price of electricity used to be wholly determined by supply and demand, but given the upheaval in the electricity market that has been experienced for the last year, the State's Dept. of Water Resources has locked in long term contracts. The average rate of those contracts has been hovering just above our capped rate for the last month and is shown on your bill. The price for electricity fluctuates on a day-by-day and hour-by-hour market structure. The price you are charged on your bill is the average price for which electricity was selling over the duration of your billing cycle.
SDG&E and all other private California utilities must buy the electricity for all of their customers from the Dept. of Water Resources. If you are a typical residential customer, this price for electricity is then averaged over the number of days in your billing cycle. SDG&E makes these average rates available. For which ever week you want to view, the current residential rate is listed near the bottom of all the different kinds of accounts and is listed as "Residential--Secondary--Total" for 29 to 35 days (5 weeks) in the billing cycle. Or you can count the eighth line up from the bottom.
Electric Energy Rate Adjustment: This credit comes about because of the legislated rate cap implemented in September, 2000. Now that the commodity price of electricity is capped at 6.5¢, the rate adjustment credits back the difference between the market price listed under the Electric Energy Charge and the capped rate for the total amount of kWh on your bill. For those customers who are with alternative providers (ESPs), you will not see this rate adjustment on your billl.
How do you make sure the adjustment was properly calculated? Take the market price from your bill and subtract $.065. Take this difference and multiply if by your kWh. This rate adjustment is what is being incurred in the balancing account that will be have to be repaid in the not-too-distant future.
Transmission: This is the cost to bring high-voltage electricity from power plants to distribution points near to you and includes the cost of high-voltage power lines and towers, as well as monitoring equipment.
SDG&E is the company that paid for the construction of the transmission grid back when it was the local, regulated utility. No other companies were allowed to generate their own electricity and build their own grid, since that would be redundant. Now that SDG&E is no longer in the business of generating power, it receives revenue by charging for transmitting electric energy from the power plant to consumers over its grid.
Transmission charge = Total Usage X $.02072 / kWh
Distribution: This charge is the cost to deliver electricity through power lines strung on utility poles, across transformers, to where you use it. This charge also includes repair crews and emergency services. Basically, this charge reflects any extensions from the transmission grid to your home and the maintenance of keeping you connected to the grid.
Distribution charge = (Baseline usage x $.08202 / kWh) + (Nonbaseline usage x $.09130 / kWh)
Public Purpose Programs: This cost provides for state-mandated assistance programs for low-income customers and energy-efficiency efforts.
Public Purpose Programs = Total usage x $.00622 / kWh
Nuclear Decommissioning: Nuclear power was once the wave of the future for power generation. In hindsight, however, the risks and costs associated with producing electricity in this fashion far outweigh the benefits of this form of "cheap" energy. SDG&E previously invested in nuclear power and subsequently bills this charge to recover the additional costs and stranded assets associated with nuclear power.
Nuclear Decommissioning = Total usage x $.00040
Trust Transfer Amount (TTA): This is a bond repayment charge, the same bond that was recently paid off 2.5 years early by SDG&E and from which customers will be receiving a refund. At the time, SDG&E purchased $650 million in bonds, of which they only subsequently needed $260 million. Therefore, the additional $390 million is being returned to the people who paid for it, averaging $260 for most customers. However, all SDG&E customers will be paying off the interest from this bond.
Trust Transfer Amt. = Total usage x $.01077 / kWh
Competition Transition Charge (CTC): When California had only regulated, monopolies as utility providers, utilities made investments in what was then new forms of power production and long-term power contracts. Those costs have always been recovered in the electric rates charged to consumers and by the revenue created from the contracts. So, in essence, this charge has always been on your bill. Now, however, in California’s deregulated utility industry, private utilities like SDG&E recover their assets that are "stranded" in these investments through the CTC charge, and thus can remain competitive in the new market. This charge will be phased out in four years.
Competition Transition charge = (Baseline usage x $.00194 / kWh)
The amounts of each line item above, when added up, should equal the Total Electric Charge amount shown under your baseline and non-baseline usages. So, you should get the exact same total in two places, which assures consumers that they are being billed appropriately (or confuses the heck out of them).
For more information, visit the SDG&E website for information on understanding your electric bill.