Sacramento Municipal Utility District customers will see increases in their bills at the start of the new year.
In 2017, SMUD approved a rate increase of 1.5 percent for all residential customers in 2018 and a 1 percent increase in both 2018 and 2019 for all commercial customers.
The utility provider said the rate increases will be used for upgrades for a modern energy grid and to meet customer needs. The increases also will go to improve technology that SMUD customers use to monitor and manage their energy use.
The rate hikes come on the heels of annual 2.5 percent increases for all SMUD customers since 2014.
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SMUD spokesman Jonathon Tudor said that “SMUD customers will still have some of the lowest electricity rates in California, about 30 percent lower, on average, than Pacific Gas and Electric Co. customers.”
SMUD said the current average monthly bill for a customer using 750 kilowatt-hours of electricity is $109.88. The 1.5 percent increase will boost that by $1.62 a month.
The utility also approved a new residential time-of-day rate, with a peak of 5 p.m. to 8 p.m. The utility said its board will consider transitioning some residential customers to the new rate as early as September 2018, with a goal of making this the standard rate for all residential customers effective Jan. 1, 2019. Tudor noted that, under that timeline, the first summer that customers would be under the new rate would be in 2019. All residential customers would be transitioned to the rate by the end of 2019.
The time-of-day rate is meant to reflect the actual cost of providing electric service during peak-use hours. SMUD said it also gives customers the opportunity to better manage electricity costs by shifting the time they use power to lower-cost time periods.
Under time-of-day rates, in the June 1 to Sept. 30 summer months, SMUD said a residential customer will pay 28.35 cents per kilowatt hour in the 5-to-8 weekday peak-use period. Customers in the mid-peak weekday period – noon to 5 p.m. and 8 p.m. to midnight – will pay 16.11 cents per kilowatt hour. Off-peak users – all other weekday hours, weekends and holidays – will pay 11.66 cents per kilowatt hour.
Rates will be cheaper during the Oct. 1-to-May 31 non-summer months: 13.38 cents per kilowatt hour from 5 p.m. to 8 p.m. on weekdays and 9.69 cents per kilowatt hour at all other weekday hours, weekends and holidays.
SMUD has projected that 44 percent of customers will see reduced annual bill costs under time-of-day rates, and about 49 percent will see an increase of $2 a month, on average. About 7 percent will see an average monthly increase of $6.80 or more. All estimates are based on customers implementing no changes in their energy use.
Not everyone was happy with SMUD’s rate hikes. Public comments made during the 2017 proposal process – and published on SMUD’s website – included objections to the 2018 general rate hike and time-of-day rates.
One submission claimed: “My husband and I are totally opposed to any rate increases. We can barely keep up with the current charges.”
On time-of-day rates, another customer noted: “I can hardly wait to see how I'll be gouged by my utility provider so that I can be comfortable in my own home because I need to use the electricity when I need to use it. I suppose I'll have to get used to being uncomfortable.”
Other public comments bemoaned the then-proposed rate increases but also praised SMUD for developing diverse energy sources.
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SMUD also is considering a proposal to adjust the structure of the Energy Assistance Program Rate to assist SMUD’s low-income customers with the greatest need. SMUD said its board will consider making adjustments to the EAPR discount as early as September 2018. Under the proposal, EAPR customers with household incomes between zero and 100 percent of the federal poverty level would receive the largest monthly discounts. The EAPR discount would be lower for customers in the upper range of the FPL.
The utility’s board of directors recently approved a $1.74 billion budget for 2018. The new budget is $161 million more than the 2017 budget, which SMUD said was mostly due to higher planned capital expenditures.
Information on the utility’s rates can be seen at smud.org/rateinfo.