At first glance, the move by local utilities (SCE, SDG&E, PG&E) to reduce their five billing tiers to four seemed like a great way to eliminate the higher cost of tier five. However, tiers three and four rates have increased so customers will pay higher rates sooner in their billing cycle.
Most consumers who install solar eliminate paying tier three and four rates, sometimes they eliminate their entire bill. Now that tiers three and four have increased, it makes even more sense to either stay in tier one and two all month long (nearly impossible if you plan to use your AC) or find a way to replace the top tiers with another method of energy production.
Since the bottom two tiers have not increased, the burden to make up the necessary rate increase falls squarely on middle class customers.
From the Assembly Utilities and Commerce Committee:
“According to the PUC testimony provided to the Assembly Rural Caucus, IOU electricity rates have roughly tracked inflation since 2003 and average between $0.14 and $0.16 among SCE, San Diego Gas & Electric (SDG&E), and Pacific Gas and Electric (PG&E). Yet some ratepayers, because they use more than their Tier 1 and 2 allocations, will pay more than double this because of current restrictions on rate design…
For example, in Southern California Edison’s (SCE’s) service territory, 66 percent of residential sales are in Tiers one and two. As a result, the remaining revenue requirement is borne by the remaining 34 percent of their sales.”
The real catch is that every time a utility customer chooses to go solar, the pool of middle-class ratepayers left to subsidize the bottom two tiers gets smaller, likely to result in overall higher rates to make up the difference.
While the California Assembly has introduced bills to help alleviate the inequity, more utility customers are seeking cost-savings by going solar. With the lower cost of materials and variety of ways to finance solar, we can’t think of a better time to give Triple Line Solar a call!