It’s no surprise that Southern Californians are seeing their monthly electricity bills surge this summer. As increasing rates have met with increasing temperatures, there have been anecdotal reports that, for some consumers, bills have skyrocketed, even by hundreds of dollars.
And Californians are looking for answers.
Why costs are rising
There are several factors that influence electricity prices across the United States, including the cost to build, finance, maintain and operate power plants and the electric grid, as well as weather conditions and state regulations, according to the U.S. Energy Information Administration.
In California, the driving force behind rate hikes is utilities recovering the cost of wildfire mitigation, transmission and distribution upgrades and rooftop solar incentives, according to a recent quarterly report by the California Public Utilities Commission’s Public Advocates Office.
Over the last 10 years, rates at California’s three big utility companies have risen as much as 110%, according to the report.
Layered on top of those climbing rates is an increase in energy use by customers amid excessive heat. And that’s the primary reason behind larger bills, said Gabriela Ornelas, spokesperson for Southern California Edison.
“The greatest impact we see on monthly bills is overall energy use,” Ornelas said.
Consumers have been moved to stay cool. Data from the National Centers for Environmental Information confirmed that last month was California’s hottest, with an average temperature of 81.7 degrees, surpassing the prior record from July 2021 by almost two degrees.
Amid the heat, the average monthly bill in July rose to $185 for Southern California Edison customers in the Greater Los Angeles area from $177.50 the month before.
Meanwhile, San Diego Gas & Electric had an average bill of $123, while Pacific Gas & Electric’s San Jose customers paid an average of $163. PG&E’s bill actually dropped from an average of $226.05 the previous month; reasons included recovery costs ending for certain past wildfires, according to Mary Flannelly, policy and communications advisor for the California Public Utilities Commission’s independent Public Advocates Office. She said that dip is likely a blip, though. “Future [rate] adjustments and rising costs” may drive rates back up, she said.
Some consumers have speculated that the larger electric bills are the result of a new rate plan that charges consumers based on when they use energy at home. Ornelas said that’s not necessarily true.
What is the time-of-use rate plan
Traditionally, customers paid for electricity based on their total consumption of energy every month. This is typically called a tiered rate plan.
By now, most California consumers, unless they opted out, have been transitioned to a time-of-use plan.
Implemented from 2020 to 2021, the plan offered by Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric was meant to align rates with the costs of producing electricity and reduce overall energy costs.
Consumers on time-of-use plans are charged based on when they use energy during the day, with seasonal changes. Each service provider has a similar baseline plan: During the summer months (June through September), the peak usage hours are from 4 to 9 p.m. During this high-demand time period, there is a higher cost for using electricity.
The rates are meant to encourage customers to shift their energy usage from periods when there is typically more demand on the electric grid and electricity is more expensive to produce, Ornelas said.
“We know 4 to 9 p.m. is usually when folks are returning from school, returning from work,” she said, “and we [understand] that some people need to use energy when they need it.” But they will pay a premium.
All three utility providers offer versions of the time-of-use plan. For example, one plan has peak hours from 5 to 8 p.m.; another is geared toward electric or hybrid car owners, who are encouraged to plug in during super-off-peak hours from midnight to 6 a.m.
To better understand which plan will best fit your energy use needs and your budget, visit your service provider’s website and use their plan comparison tool.
How to cut your costs
Switching up your energy use habits can cut the cost of your bill, but you might need some reminding. You can sign up for Flex Alert notifications via text or email to help nudge you in the right direction.
Flex Alerts are typically issued a day ahead to help consumers plan out how to reduce their energy use during the summer peak hours. During those hours, if you can, avoid using larger electric appliances. Instead, use them in the morning or early afternoon.
The alerts also may be issued when there are unplanned power…
Read More: Californians say electric bills are surging: What to know