Enhancing Affordability and Transparency in Your Utility Bills
To help California reach its clean energy goals and make using electricity more affordable, utilities across the state are updating the way residential customers are billed for service.
A New Approach for Structuring Electric Bills
On May 9, 2024, the California Public Utilities Commission (CPUC) unanimously approved a change in how residential electric customers are billed. The new structure establishes a fixed charge for residential electric customers to help lower electricity rates, provide more monthly bill stability, and support a more affordable transition to clean energy.
All customers already pay for the cost of building and maintaining the electric grid, wildfire prevention, and customer assistance programs through the price you pay for the electricity you use. This restructuring of billing moves some of these existing fixed costs into a separate line item on your electric bill. This is not an additional charge but rather a change in how your bill is structured.
This new billing structure was developed in response to state law (Assembly Bill 205) that requires the CPUC to adopt a fixed charge. Learn more on the CPUC’s website.
At SDG&E, we anticipate implementing this new billing structure in the fourth quarter of 2025.
Fixed Charge Amounts
The fixed charge is applicable to all residential customers. The default charge is $24.15 per month and does not require new income verification processes. However, if customers are currently enrolled in the CARE (California Alternate Rates for Energy) or FERA (Family Electric Rate Assistance) programs, or if they live in affordable housing, they may be eligible for a discount based on their enrollment status.
Customers will continue to pay for delivery and electric generation charges, which vary month-to-month based on how much you use and when. Under this new billing structure, the cost per kilowatt hour will be lower than current pricing.
Monthly Fixed Charge
|
Default |
Income Qualified Discount | Income Qualified Discount |
|---|---|---|
|
$24.15 All customers not enrolled in CARE or FERA |
$12.08 FERA enrolled customers or customers who live in affordable housing restricted to residents with incomes below 80% of Area Median Income |
$6.00 CARE enrolled customers |
As per CARE and FERA program rules, customers may be asked to verify their household income.
Separate Charges
Changing how residential bills are calculated does not result in the collection of more money from customers overall, and SDG&E does not earn more profit because of it. Companies like cell, water, and cable service providers already include fixed charges on their customer bills.
Customer Benefits
Changing residential bills will help Californians move towards the state’s clean energy goals by encouraging the electrification of homes and vehicles. Visit our Home Electrification page for more information on electrification. Other benefits include:
- Increasing Transparency. Separating certain utility fixed costs from electricity usage rates and clearly showing those different line items on monthly bills will add transparency and predictability.
- Supporting Affordability: The new billing structure is designed to reduce bills for low-income households. Customers who currently receive bill discounts under the CARE and FERA program will continue to receive them along with a discounted fixed charge.
- Lowering the Electricity Rate. With certain fixed costs separated from electricity usage rates, the cost for each unit of electricity (cents/kWh) paid by customers is reduced. Lowering the cost of each unit of electricity makes using it more affordable.
- Promoting Clean Energy: Lower electricity usage rates encourage the shift to electric-based solutions, like electric vehicles or all-electric appliances. This shift helps support a 100% clean energy and carbon-free future by 2045, as mandated by the state.
What is Not Changing
While this is a change for California customers (and the utilities that serve them), what is not changing is safe and reliable electric service from SDG&E. There are a number of other items not changing, including:
- CARE and FERA Discount - Customers enrolled in CARE and FERA programs will continue to receive their monthly discount.
- Community Choice Aggregators - If you are a CCA customer, you will continue to receive your electricity from Clean Energy Alliance (CEA) or San Diego Community Power (SDCP). The fixed charge only affects the SDG&E portion of your bill, which is related to grid operation, maintenance, and customer service. Third-party electricity providers will continue to determine your electric generation charges.
- Time-of-Use - While the new billing structure will provide more predictability, customers will still have control over their energy use. Shifting chores and using major electronics outside of the hours of 4 p.m. to 9 p.m. is still important to lower your kWh use and sustain grid reliability. Learn more about our Time-of-Use plans.
- Medical Baseline Customer - Customers enrolled in Medical Baseline will continue to receive their additional energy allowances.
- Payment Plans - Payment arrangements will not be affected.
- Gas Charges - The electric BSC will not change how your gas bill is charged.
- Commercial and Agricultural accounts – The changes in how electric bills are restructured only applies to residential customers.
Why the Change?
In June 2022, California passed a law (Assembly Bill 205) requiring the CPUC to change how electric bills are structured for residential customers, and Governor Newsom signed it into law.
Many voices, including consumer advocates, policymakers, academic researchers, and environmental groups, have called for rate reform to make electricity more affordable and to support California’s clean energy transition. Under state climate policies, our lives – including the cars we drive and the homes and offices we work in – will be increasingly powered by electricity, rather than fossil fuels.
Frequently Asked Questions
All customers are assigned the default fixed charge, unless they are enrolled in one of the bill discount programs, California Alternate Rates for Energy (CARE) or Family Electric Rate Assistance (FERA), or if they live in eligible affordable housing.
No income information will be collected beyond that used by the CARE/FERA programs.
The discounted fixed charge is based on current enrollment in CARE or FERA. If you are no longer enrolled in either of these programs, you will be assigned the default charge.
Income qualifying customers who currently receive bill discounts under the CARE and FERA programs will continue to receive them, as well as a lower fixed charge compared to customers not enrolled.
Enrollment in CARE or FERA is based on household income or participation in certain public assistance programs. For more information visit sdge.com/assistance.
To confirm your enrollment in CARE or FERA, you can check the first page of your bill.
Yes. A portion of the bill is still based on how much electricity a customer uses, and for Time-of-Use customers, when you use energy. Customers on Time-of-Use pricing plans still have more choice and control over their electricity bill by shifting when they use energy outside the hours of 4 p.m. to 9 p.m.
Residential customer electric pricing plans will include the fixed charge once implemented in the fourth quarter of 2025. The change in billing does not apply to natural gas service.
The overall impact of the fixed charge will vary by individual household incomes, energy consumption levels, and usage patterns. While most customers will pay $24.15 for the fixed monthly charge, their electricity usage rate will be reduced. As households electrify, depending on usage, the total cost of household energy (gasoline, natural gas and electricity) could be reduced.
The fixed charge applies to all residential customers, including solar customers. Solar customers will continue to save and pay lower bills than if they did not have solar. Solar customers will continue to be compensated for electricity they export back to the grid, but the fixed charge ensures all customers pay a fair amount for expenses related to fixed costs that all customers benefit from, such as grid maintenance and upkeep.
The fixed charge covers some of the fixed costs required to service customers, including certain costs related to maintaining and modernizing the power grid, as well as supporting public purpose programs like energy efficiency and customer assistance programs.
No. Utilities will not earn additional profit from the fixed charge.
The fixed charge model in California supports electrification efforts by helping to make it more affordable to adopt electric technologies and supports the broader shift towards a cleaner and more sustainable energy future that is less dependent on fossil fuels.
Moving some of the fixed costs needed to serve customers out of the price per kWh into a fixed charge means the price of electricity can be lower compared to today. Lowering the overall cost of electricity can make adopting electric appliances and electric vehicles more attractive. EVs contribute to the overall electrification goals by reducing dependence on traditional internal combustion engine vehicles, which significantly contribute to carbon emissions.