SDG&E Introduces New Default “Time-of-Use” (TOU) Plans

SDG&E Introduces New Default “Time-of-Use” (TOU) Plans

SDG&E is Acting on The New Time of Use Plans

You know those summer days when you arrive home from work exhausted, hungry and hot – on the way in you grab your mail, kick on the AC, and preheat the oven in preparation for dinner. Well, you may want to open a window, opt for pizza, oh, and be sure to read that notice from your local power company & their new time-of-use plans instead. There’s a change in how you’re being charged for your electricity usage and it’s already underway.

Utility companies have pushed the California Public Utilities Commission (PUC) and California legislature to move from a tiered billing system to a “time-of-use” (TOU) billing system. Among three of California’s major power companies, San Diego Gas and Electric (SDG&E) is the first company to act on this new directive. The billing system includes revised “peak hours” and two new time-of-use rate plans, one of which will replace the current default billing format.

Rob Nikolewski from The San Diego Union Tribune states that “California’s policy makers also hope the wide spread adoption of time-of-use will lead to a boost in sales of battery storage systems paired with solar panels.” On the contrary, a boost in battery sales might just be an unintended consequence of the drastic and recent changes the power companies have been making. And coming from a practical standpoint, these peak hours could potentially counteract solar energy production. This is because the peak hours that SDG&E has allocated for their customers are also the same hours when a power surge is almost inevitable and even mandatory in some homes.

The Lowdown… what you should know about the change to Time-of-Use plans.

The shift began in March of this year and is set to be complete by mid-2020 with 75,000 to 100,000 SDG&E customers. The pattern will continue each month until almost all 750,000 customers in SDG&E’s service sector have been switched. The new billing system also includes new “peak hours.” Initially, peak hours fell between 11a.m. and 6p.m. The revised peak hours are now from 4p.m. to 9p.m. but didn’t the utility companies spend the early 2000s persuading us that these hours were the best hours to use electricity? Ah, the ole switcharoo. Nice job power companies. SDG&E has introduced TOU-DR1 as the new default billing format (DR-SES for most NEM customers with solar systems). TOU-DR1 divides the day into three intervals: on-peak, off-peak, and super off-peak. Also introduced are TOU-DR-P and TOU-DR2 who’s plan is similar to TOU-DR1, but the days are only divided into two intervals. There is no super off-peak. FYI, customers can opt to stay on SDG&E’s standard tiered plan at no extra cost! But there’s a catch: you have to call SDG&E and specify your preference. Be forewarned, it may take a call or two to accomplish going back to your original tiered rate plan. If you would like to test the time-of-use waters, SDG&E offers “bill protection,’ which will allow customers to receive a “shadow bill” included with their monthly billing statement. Shadow bills will show the difference between the time-of-use rate you opted for and the tiered rate you were previously on, giving you an idea of the new billing format’s performance. 

What does this mean for solar customers?

Although SDG&E will switch both solar and non-solar customers to time-of-use rate plans, NEM 1.0 customers may be eligible to remain on the tiered rate for another 5 to 20 years starting from their PTO date by being “grandfathered” in. This is something you will need to speak with SDG&E about. You may have to press the issue for your billing format to be switched back to the tiered rates. In fact, when you contact SDG&E, ask to speak with one of their Solar Specialist. Solar Specialists are knowledgeable and will be able to walk you through the available plans that will most benefit you. Changes for new NEM 2.0 customers include mandatory default time-of-use rates and taxes/charges that cannot be bypassed. time-of-use rates will also vary depending on time of day (keep the revised peak hours in mind) and energy demands. Credits for solar customers and production also varies dependent upon time-of-use. Potential NEM 2.0 customers can reach out to one of our solar consultants to inquire about the design of their solar panel system that will benefit them.

Choosing the plan that’s right for you.

  • First thing first – become familiar with all of the available rate plans. SDG&E may suggest and even advertise only two or three available plans to opt from, but there may be a third or fourth option they might not want you to know about.
  • Talk to SDG&E about being grandfathered in. Customers who are eligible to be grandfathered in will receive more time to maximize their savings, build new and beneficial energy preservation habits, and it gives you some time to prepare for the switch.

What if I can’t be “grandfathered” in?

Once you’ve been informed of all available plans, old and new, take a moment to compare them to each other. Review your past and current electricity bills. Then consider what days and times you use the most power to determine where you can afford to cut energy usage. Laundry could wait until the weekend, dishes could be hand washed (instead of using the dishwasher). Tablets and phones can be charged after 9p.m., and you could use those same devices for entertainment instead of turning on the TV. The more electricity you use during peak hours, the more you pay.

Another option would be taking a look at your solar system’s energy production. Are you producing enough energy to offset your usage? If not, this could pose a reduction in your yearly savings. Adding to your solar system is an option you might want to consider. It’s best to speak with one of our solar energy consultants to inquire about the benefits of adding to your solar system.

And don’t fret – even with the current inconvenience of the power companies’ new rate plans, solar still makes sense. And every time these power companies’ contrive blows in the form of soft-pedaled penalties at the solar industry, solar makes even more sense. Here at Palomar Solar we pride ourselves on ethicality and will always be upfront when it comes to providing you with the information you seek. No gimmicks, no change orders, and honesty, 100% of the way. They say knowledge is power: and while we may not have complete control over the power companies, if we’re knowledgeable and informed, we might just be able to outsmart them.