Factors Impacting Your Energy Bill
What Goes Into Your Energy Bill, and Why Are Rates Higher?
Energy bills can be complicated. We totally get it. And we're committed to helping you make better sense of your bill and your energy rates. Whether you receive electric only, or both electric and gas service from SDG&E, the total cost of supplying energy to your home is made up of several factors:
- Generation is the cost of buying the energy from the power plant where electricity is produced, as in where it’s generated. SDG&E and Community Choice Aggregators purchase energy on behalf of their customers. The price SDG&E pays for that energy is the exact same price our customers are charged. There is no markup of any kind and SDG&E makes no profit.
- Natural Gas Charges include the cost of the gas that you use for heating and gas appliances such as water heaters and stoves, along with the costs of getting the gas to you.
- Delivery is the costs of operating energy systems along with construction, modernization and overall upkeep of pipes, wires, substations and other equipment needed to deliver electricity and natural gas to the communities we serve. Delivery also includes costs for customer service, service technicians, meters and other equipment needed to operate the utility.
- Public Purpose Programs are state-mandated programs funded through energy bills like financial assistance for income qualified customers and energy efficiency programs. SDG&E does not earn any profit on these programs.
- Taxes and Fees include items such as taxes from the state of California and from the city that you live in. Examples include the State Surcharge Tax, State Regulatory Fee, Franchise Fees and other similar taxes and fees. SDG&E does not earn any profit from these charges.
Factors Affecting Your Monthly Bills
There are a lot of different factors that affect energy bills. Here are some of the reasons your bill might vary from month to month.
Weather
Extreme temperatures, both hot and cold, can change the amount of gas and electricity we all use. In the winter months, we use more gas or electricity to heat our homes and businesses. In summer, energy usage increases as AC units are cranked up to beat the heat. Extreme changes in temperature can also impact energy supply and demand, which can lead to higher bills. As demand goes up and supplies go down, the price of energy itself goes up.
Usage
The more we use individually, the higher our bills. Increased use of appliances during colder weather affects your bill. Some appliances, like electric heaters, use a lot of energy. Water heaters also work longer and harder to heat up colder water. Having guests, cooking at home more, using more lights and leaving appliances on can all affect your bill.
Energy Market
Natural gas is a commodity that is traded worldwide, and it’s used to generate the electricity we use in addition to heating some homes and powering appliances like stoves, water heaters and such. Just like gas prices at the pump, the price can vary month-to-month based on limited supply, maintenance activities, weather and customer demand.
The price that SDG&E pays for gas and electric generation is the same price our customers pay. If SDG&E pays a dollar, our customers pay a dollar.
We use a suite of tools to ensure that our customers get the best possible prices. Long-term contracts and use of storage fields that allow us to stock up on natural gas during lower cost periods are two ways we work to mitigate prices.
Climate Resiliency Investments
Given the growing threats posed by climate change, California and local governments have established ambitious goals to slash greenhouse gas emissions via 100% carbon-free electricity, zero-emissions clean transportation and net zero buildings.
To meet California’s goals and keep electricity flowing reliably, power companies across the state must make ongoing investments to modernize and climate-proof their infrastructure. Some of the major updates on infrastructure include:
- Undergrounding power line to reduce wildfire risk
- Installing microgrids to keep critical resources powered during extreme weather conditions