SDG&E Latest Price Scheme

Today, pricing is divided into four tiers, with rates rising steeply as a household uses more power over the course of a month.

The utility’s proposal would create two tiers with less severe price jumps.

If your power bill is really high, the proposal would cut it substantially, with rates falling 30 percent in the top tiers. If you’re an energy miser like me, you’re in for a modest shock, with rates rising 8 percent in lower tiers.

Environmentalists should hate this idea, because it waters down incentives to conserve. And it cuts into a big advantage for people who install solar panels on their homes to escape the high-priced, upper tiers.

But fair is fair. When you’re regulating a monopoly, the closer a rate system gets to allocating costs equally among customers, the better it is.

There is one caveat. SDG&E’s plan would introduce a fixed fee applying to everybody. This unduly discourages thrift for no good economic reason.

Utility executives argue that fixed fees would help fairly spread the fixed costs of their vast network of wires, transformers and other essential equipment.

Yet Chevron somehow manages to recover much larger fixed costs from consumers each time we stop at the gas station. It’s hard to see how there’s anything fairer than paying your way, one gallon or kilowatt-hour at a time.

This utility proposal for a fixed charge is more correctly viewed as politically deft attempt to improve fairness for people without rooftop solar systems. Under current regulations, solar owners get to sell their power into the grid at the full retail price, offsetting their costs at night when they pull electricity into their homes.

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