SAN DIEGO, May 2, 2002 — The California Public Utilities Commission (CPUC) Thursday modified and expanded its original plan to give San Diego Gas & Electric (SDG&E) customers a higher electric “baseline” amount, effectively lowering their cost of energy during the hot summer months.
Traditionally, all utility customers have been allotted a baseline amount of energy they can use at the lowest price — an allocation of electricity designed to cover a customer’s basic energy needs. When customers exceed their baseline amount, the price of the energy they use increases. Today’s CPUC decision increases the baseline allowances for many SDG&E customers, allowing them to use a greater amount of the lowest-priced power.
“This is good news for our customers,” said Anne Smith, vice president, mass markets, for Sempra Energy Utilities, SDG&E and Southern California Gas Co. “The CPUC’s actions will provide our customers with relief when they need it most — during the warm summer months.” A typical customer using 500 kilowatt-hours a month will see a reduction of approximately $2 to $3 a month.
Because customers living in different areas face varying weather conditions, baseline amounts are tied to climate zones. In SDG&E’s area, traditionally there have been three climate zones, corresponding to the coastal and inland areas, the mountains and the desert.
The CPUC today approved SDG&E’s plan to split its largest climate zone (Climate Zone 1) into two zones, providing an additional baseline allowance of approximately 107 kilowatt-hours (kWh) a month to inland electricity customers. More than 98 percent of SDG&E customers resided in Climate Zone 1, which was established in the 1970s. The original zone stretched from the coast to El Cajon, covering customers with varying microclimates in the coastal and inland areas.
“When the climate zones were last set in the 1970s, the inland part of our service territory was much less developed,” Smith said. “Because of the hotter temperatures our inland customers face, they need more energy to cool their homes and businesses, and the new climate zones reflect this.”
The CPUC has been reviewing the baseline allowance issue for more than a year and has approved an increase for most customers of SDG&E, Southern California Edison and PG&E beginning June 1. The CPUC had scheduled a review of climate zones later this year, but SDG&E proposed a modified plan to provide even more relief sooner for its inland customers this summer.
Customers in the new coastal zone will see the baseline increase from 252 kWh a month to 309 beginning June 1, and customers in the new inland zone will see their baseline increase from 252 to 309 on June 1, rising to 359 kWh on July 1. Baseline in the mountain zone will increase from 301 kWh to 470 kWh, and baseline in the desert zone will go from 347 kWh to 526 kWh beginning June 1.
This will be the first summer for SDG&E’s customers under a tiered-rate system, which was imposed by the California Public Utilities Commission last fall to encourage conservation. Under the system, electric costs escalate based on the amount a customer uses above the baseline amount. For example, customers who use less than 130 percent of baseline pay 6.5 cents per kWh for electricity. The electricity cost rises to 7.42 cents per kWh for usage within the 130-percent-to-200-percent range of baseline and continues to increase on a per-unit basis as energy use increases.
“Even with the relief provided by this decision, we are urging customers to find new ways to conserve,” Smith said. “This will be the first summer under a tiered-rate system. The more electricity our customers use, the more expensive it will be, so efforts to conserve will be even more critical this summer, especially for high-energy users.”
SDG&E last month alerted its commercial customers to be prepared for seasonal summer rates put in place last year by the CPUC to encourage conservation. From May to September, small-business customers will experience approximately a 20 percent electric-rate impact from winter to summer. SDG&E has launched a Summer Preparedness Program to help customers get prepared.
San Diego Gas & Electric is a regulated public utility that provides service to 3 million consumers through 1.3 million electric meters and 775,000 natural gas meters in San Diego and southern Orange counties. SDG&E is a subsidiary of Sempra Energy (NYSE: SRE – news), a Fortune 500 energy services holding company based in San Diego.