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SoCal Edison Electricity Rates Increase in 2018

20 March 2018

It's common knowledge that the cost of solar panels and other solar related technologies has dropped significantly over the past decade and will continue to drop. Overall, this is a very good thing because it leads to a higher rate of adoption by the general public.
One overlooked aspect, however, is the continuously increasing cost of electricity in the US, which is estimated to go up by 8.4% from Jan. 2018 to Dec. 2019.
The national trend of increased electricity rates is no different on the local level for customers of Southern California Edison (SCE). Recently, SoCal Edison announced an increase for their 2018 electricity rates and are planning to set a dynamic charging system for electricity consumption in 2019.
SoCal Edison’s pricing update casts a shadow over some of their other benefits, like their recent $10,000 BMW i3 incentive, but increased rates are expected for this industry. This is why to maximize your long-term energy savings it is important to install a solar panel system as soon as you can.

SoCal Edison’s New Electricity Rates

SoCal Edison uses a tier system to determine the rate at which a customer will be charged for their electricity consumption. There are total of three tiers, and each tier has a different rate. The 3 tiers stack on top of one another and are based on the total quantity of electricity that the customer uses each month.
Here were the original rates for SoCal Edison:

• Tier 1
  0-324 kWh
  $0.16/kWh
• Tier 2
  325-1296 kWh
  $0.25/kWh
  
• Tier 3
  1297+ kWh
  $0.31/kWh

These are the new 2018 rates:

• Tier 1
  0-356 kWh
  $0.17/kWh
  
• Tier 2
  357-1424 kWh
  $0.25/kWh
  
• Tier 3
  1425+ kWh
  $0.33/kWh

There are a few noticeable changes. First, SoCal Edison has raised the threshold for entering each tier. The amount of kWh included in tier 1 increased by 9.9%, and the rate for this tier also went up by 6.25%. Similarly, the cost for tier 3 went up by 6.5%.
Another important thing to note is that the cost for tier 2 stayed the same, while the amount of kWh within this tier increased by almost 100. Extending the quantity of kWh within tier 2 and keeping the rate the same will be beneficial for the majority of households, but let’s see if this is true overall.
To get a better picture of how this may affect you, we can look at the average amount of electricity a household uses to see how much the overall bill would have increased.
In the United States, the average annual consumption of electricity in 2016 for a household was 10,766 kWh, or 897 kWh per month. If we go off of this data, we can calculate the cost by using the 897 kWh value. Here are the original and new costs for SoCal Edison’s plan:

1. Original Prices
   (324 kWh * $0.16/kWh) + (573 kWh * $0.25/kWh) = $51.84 + $143.25 = $195.09
   
2. New Prices
   (356 kWh * $0.17/kWh) + (541 kWh * $0.25/kWh) = $60.52 + $135.25 = $195.77 (0.35% increase)
   

So, what we can see is that the cost for an average household will increase, but it will be increasing by an almost irrelevant amount. Obviously, because this is a tier based system, if you are consuming different quantities of electricity than the national average, you may be hit with significantly higher increases than this, but it is up to you to run those numbers.
It seems like SoCal Edison is targeting the outliers, and with this model they may be able to make enough additional revenue to leave the majority of consumers relatively untouched.

SoCal Edison’s 2019 Rates

In 2019, SoCal Edison will be implementing a dynamic rate system where the cost for a customer’s electricity use will be based on when it is consumed, also called a Time Of Use (TOU) rate structure. Check out the details in the image below.

Here is some information that we can extract:

• The rates vary greatly throughout different times of the day
• The cost is significantly cheaper from 10pm to 8am
• Peak times are weekdays from 2pm to 8pm

This is also just the summer rates, so if you are looking for all of the details you can check out SoCal Edison’s time-of-use plans to learn more. This type of system works much better for individuals who are able to manage when they use their electricity, like if you have a combined solar plus battery storage system.

Rates are Going Up, Solar Prices are Going Down

The cost of electricity is going to continue to increase each year, so if you do not have a solar panel system installed, you will pay even more than your current bill. Fortunately, the cost for solar is steadily decreasing. Customers of SoCal Edison are already seeing the impact of this trend, and companies around the country will follow. The best thing you can do to combat this is to instal a solar panel system today.