Upcoming Changes to PG&E Rates

Tier collapse

PG&E has begun the process of reducing the number of tiers in the standard rate plan. This started in 2015 and will continue to 2019. In 2016 the number of tiers in the standard rate plan went from 4 tiers to 3 tiers. In 2017 the plan is to go from 3 tiers to 2 tiers. Although this methodology may be somewhat easier to understand on your PGE bill and have more transparency in the pricing for consumers, it will definitely increase the cost of energy, especially for those in the lower tiers (low energy users).

Tier Price Adjustments

With each tier change, there will be “tier price adjustments” periodically, which usually means that prices will be increased to “more accurately reflect the cost of providing electric service to customers”. Notice in the table on the right that “tier price adjustments” are included in almost every year, which is a bit unsettling as prices are highly unlikely to decrease overall.

Minimum Bill Introduced

The minimum bill will now be $10 per month for every single household. Although this may not seem significant, this means that even if you are out of the country for a month and use little to no energy, you are still contributing to the pot just like everyone else. You could turn everything off for a month and still be paying for some of your neighbor’s daily usage.

Time of Use Optional (For Now)

There will also be another option offered to California customers, introduced in 2016 and becoming mandatory for all in 2019: Time of Use rate structures. This rate structure will make energy cost less during times of day when energy is in low demand, such as late night, early morning and mid-day. But make no mistake that this will save people money overall: it will only cause rates to be more expensive during the peak hours when most of us NEED to use the most electricity from 5-9PM. Can you imagine most Californians turning off the lights and leaving the dishes unwashed in the evenings? Can we do our laundry between midnight and 5am? Whats the point of a hot tub when you can’t use it after work without being penalized. It is unlikely that anyone would be able to change their lifestyle enough to benefit from these lower priced times of day.

Some basic math shows us that the base rate of electric consumption used to be (and will probably still be comparable to) 350 Kilowatt hours per month. 400% of this would be 1400 Kilowatt hours, which we see on a regular basis from the utility bills our customers give us to complete their proposals. If they reach this quantity of energy consumption, they will be charged 219% of the tier 1 rate (16 cents kWh under the old rate structure) .. meaning they would be paying at least 35 cents kWh, which multiplied by 1400 Kilowatt hours amounts to a monthly bill of $490. This would represent an average monthly bill if the SUE Tier was reached most of the year, but just reaching it some of the time could easily lead to a monthly bill of at least $400. Although 400% sounds like an impossible energy usage to reach, take a look at the table to the right. When we create proposals for our customers showing them how much switching to solar can save them on their utility bill, we analyze how often they fall into each tier on average.

Clearly, the coming changes to the tier rate structure are not spelling out big savings for California residents. Although there are simple things that you can do to reduce your energy consumption, there is simply nothing that can prevent these rising costs when sticking with PG&E. By switching to solar energy, you can eliminate your electricity bill and lock in your lower rates for years to come. We at Wired Into the Future can help you save BIG on your energy bills. Don’t hesitate to request your free no-hassle quote TODAY. Together we can improve your overall financial security and save you from the upcoming rising costs of The Utility.

Don’t wait any longer, now is the time to take action before it’s too late. PG&E has been mandated by the state to provide better transparency in their operations, emancipate yourself from the ever-increasing prices of the Utility. Fill out the short contact form below, and we will get the ball rolling, to liberate your family from PG&E rate increases.

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