RESOLUTION OF THE CITY COUNCIL OF SAN DIEGO OPPOSING THE PROPOSED

CHANGES TO SDG&ES RESIDENTIAL ELECTRICITY TARIFF STRUCTURE (DRAFT)

WHEREAS, prior to the California energy crisis of 2000-2001 San Diego Gas and Electric
(SDG&E) had a two-tier rate structure, a lower rate for basic electricity needs and a higher rate
(20 percent higher) for higher levels of consumption; and
WHEREAS, in response to the energy crisis the state legislature passed SB1X in 2001 and put in
place a five-tier residential rate system (modified to four tiers in SDG&E service territory), and
froze the rates in the bottom two tiers to protect consumers from price shocks for basic electricity
needs; and
WHEREAS, the highest tiers of the current rate structure, Tiers 3 and 4, are approximately 115
percent higher than the Tier 1 and 2 rates; and
WHEREAS, SDG&Es current rate restructuring proposal, in response to the 2013 passage of
AB327 rate restructuring legislation, is a return to the pre-energy crisis two-tier rate structure
with only about a 55 percent difference between the lower and higher rate categories; and
WHEREAS, customers with limited economic means are currently eligible for subsidies through
the California Alternative Rates for Energy (CARE) program, and the proposed SDG&E two-tier
rate structure will decrease this subsidy from 39 percent to 34 percent in 2017, disadvantaging
SDG&Es most needy customers; and
WHEREAS, this restructuring proposal means that current SDG&E customers that are low users
of electricity and pay only the Tier 1 and 2 rates will experience an 11 to 15 percent rise in
electricity costs in 2015; and
WHEREAS, this restructuring proposal means that high users of electricity will receive a cost
savings on current Tier 3 and 4 rates of 21 to 24 percent under SDG&Es new rate structure; and
WHEREAS, most high users of electricity can voluntarily choose to reduce their consumption
and avoid higher Tier 3 and 4 rates; and
WHEREAS, the proposed change in rate structure negatively impacts SDG&E customers that
are most effectively conserving electricity and rewards customers that do not conserve; and
WHEREAS, the proposed SDG&E fixed fee increase of $5 per month on approximately 1.4
million residential accounts represents an increase in fixed revenue to SDG&E of about $70
million per year; and
WHEREAS, the proposed $5 per month increase in residential customer fixed charges reduces
the financial incentive for residential customers to conserve electricity; and

WHEREAS, the goal of the City of San Diegos Climate Action Plan is 100 percent renewable
electricity by 2035; and
WHEREAS, every kilowatt-hour saved through energy conservation avoids a kilowatt-hour that
must be generated by renewable energy resources to meet the Citys 2035 target;
NOW THEREFORE BE IT RESOLVED THAT the City Council of the City of San Diego
opposes the proposed changes to SDG&E residential electricity tariff structure, in their current
form, as detrimental to achieving the City of San Diego Climate Action Plan goals and punishing
of customers that are conserving energy.