Rate change archive

SMUD rate changes beginning in 2024 include an increase in rates and other changes.

Overview

SMUD’s 2023 Chief Executive Officer & General Manager’s Report and Recommendation on Rates and Services proposes changes to SMUD’s rates, including:

• An increase in rates in 2024 and 2025 for residential and non-residential customers.
• Using non-retail rate revenue to provide more assistance to customers on the Energy Assistance Program Rate (EAPR) who need it most.
• Other minor miscellaneous rate updates.

Customer resources

• Rate change fact sheet - English | Spanish
• 2022 Rate Costing Study
• CEO & General Manager reports

Rate increase

The proposal includes the following rate increases for all customers:

• 2.75% effective Jan. 1, 2024
• 2.75% effective May 1, 2024
• 2.75% effective Jan. 1, 2025
• 2.75% effective May 1, 2025

SMUD is committed to keeping rate increases within inflation through 2030.

How will this impact my bill?

The increases will impact all customers differently, depending on how much electricity is used each month.

For the average residential customer, the rate increases would add:

• $3.61 per month beginning Jan. 1, 2024
• $3.72 per month beginning May 1, 2024
• $3.81 per month beginning Jan. 1, 2025
• $3.92 per month beginning May 1, 2025

Why rate changes are needed

We work hard to control costs and operate as efficiently as possible. The need for the modest rate increases is due to several factors, including:

• Wildfire prevention and mitigation
• Infrastructure improvements to maintain high reliability
• Clean energy compliance requirements
• Increased operating costs including materials and labor costs

Additional discount for our most vulnerable customers

We recognize the needs of the under-resourced community, particularly those who qualify for the Energy Assistance Program Rate (EAPR). The current EAPR discount is based on income level using the Federal Poverty Level (FPL) as the guideline, allowing more assistance for those customers that need it the most.

The proposal includes a recommendation to create an EAPR discount using approximately $2 million of non-retail rate revenue to increase assistance to those customers most in need, which fall in the range of 0-50% of FPL.

Holidays with off-peak rates

The proposal also recommends updating SMUD’s rate holidays to align with Federal holidays, including removing Lincoln’s birthday while keeping President’s Day, adding Juneteenth, and revising Columbus Day’s name to also include Indigenous Peoples’ Day.

Other items

Other minor changes included in the proposal are updates to the Generator Standby Charge, changes to the Hydro Generation Adjustment (HGA) tariff, including a methodology to bill unauthorized use of non-residential service, and removing legacy rates that are no longer used.

SMUD rate changes beginning in 2022 include an increase in rates and other changes.

Overview

SMUD’s 2021 Chief Executive Officer & General Manager’s Report and Recommendation on Rates and Services was approved by SMUD's Board of Directors.

The following rate changes were approved in 2021:

• An increase in rates in 2022 and 2023
• A new Solar and Storage Rate for customers that add onsite generation, such as rooftop solar
• A new optional Critical Peak Pricing (CPP) rate for residential customers to help meet peak energy demand when it’s needed most
• Minor tariff language changes
• A revision to SMUD's Open Access Transmission Tariff (OATT)

Customer resources

• General Manager's Report Volume 1
• General Manager's Report Volume 2
• General Manager’s Report on Open Access Transmission Tariff (OATT)
• Rate change fact sheet
• Solar and Storage Rate fact sheet
• SMUD-Resolution-No-21-08-06
• Resolution 21-09-06
• Resolution Attachment E
• Resolution 21-09-07
• Resolution Attachment F
• Resolution 21-09-08
• Resolution Attachment G
• Resolution Attachment H

Rate increase

The approved changes include the following increases for all customers:

• 1.5% rate increase effective March 1, 2022
• 2% rate increase effective January 1, 2023

The rate increases are well below the forecasted rate of inflation and support SMUD’s commitment to keep rate increases at or below inflation through 2030.

How will this impact my bill?

The increases will impact all customers differently, depending on how much electricity is used each month.

The average residential customer will see an increase of:

• About $1.91 per month in 2022
• An additional $2.57 per month in 2023

Solar and Storage Rate

A new Solar and Storage Rate applies to customers approved to connect to SMUD’s grid on or after March 1, 2022.

This new rate structure and the supporting programs and incentives will transform the solar market. Customers will move from solar only to solar and storage because it brings greater value and broader benefits to all customers. The new rate is the outcome of extensive collaboration that began in 2019 with representatives from the solar and storage industry.

Key details

• Solar customers on the existing Net Energy Metering (NEM 1.0) rate can remain on that rate through 2030.
• We’ll provide incentives and programs to encourage the adoption of solar with energy storage (batteries) and continue to support the solar and storage industry.
• When solar customers have excess power they do not use or store in their battery, they can sell it back to SMUD.
• The proposal outlines SMUD buying this excess electricity from the customer for 7.4¢/kWh, no matter the time of day or season. This rate would be effective March 1, 2022.
• Along with the new rate, the proposal includes a one-time fee to connect new solar systems to SMUD’s grid to recover the cost of providing that service, which includes a technical document review, validation of system sizes, integration costs into our distribution system and processing of the application. SMUD is one of the few utilities that does not currently charge a fee. The fee would be applied to all new systems starting March 1, 2022.

With this new solar and storage recommendation, we’re committed to bringing the benefits of solar to our under-resourced multi-family dwelling communities through a Virtual Net Energy Metering program, where solar and storage customers can share their clean solar energy through our grid with others in the community.

Finding a solution

In 2019, we introduced a new rate recommendation for customers with onsite generation, such as solar — a grid access charge.

We made the decision to change course and removed the grid access charge recommendation from the final 2019 CEO & General Manager's Report and Recommendation on Rates and Service and committed to embark on a collaborative journey with our customers, stakeholders and the solar and storage industry to develop a new recommended solar and storage rate.

In October 2019, we kicked off a technical working group with key stakeholders from the solar, storage, environmental and under-resourced community organizations to reach agreement on the inputs for the Value of Solar Study.

In September 2020, we published a Value of Solar and Solar + Storage study, which was a detailed independent study based on the technical working group’s agreed upon inputs to value the costs and benefits of rooftop solar energy in Sacramento.

In October 2020, we invited a wide-range of organizations to collaborate with us and help design a revised solar and storage rate that benefits all customers to include in this year’s rate action. The outcomes of the Value of Solar Study were incorporated in the proposed rate recommendation. 

Over the last 6 months, input from representatives of the solar and storage industry was instrumental in co-designing the proposed solar and storage rate.

Critical Peak Pricing Rate

The 2021 GM Report included a new Critical Peak Pricing (CPP) Rate option for residential customers effective June 1, 2022. The Time-of-Day (TOD) 5-8 p.m. Rate remains the standard rate for all residential customers.

The CPP Rate is designed for our customers to help reduce demand on our grid during times when there are emergency conditions with the power system or when the energy demand is at its highest. Customers who voluntarily participate in the CPP Rate will be asked to reduce their energy usage and dispatch their stored energy if they have a battery to help conserve electricity when it’s needed most to take pressure off of our grid.

The CPP Rate works by charging an additional price per kWh during an event. The events will last 1-4 hours and may be called only once per day at any time of the day during the summer months (June – September), including weekends and holidays. In exchange, customers will receive a discount on Summer Off-Peak and Mid-Peak prices. SMUD will notify customers a day in advance before a critical peak event is called, though we may call the event with shorter notice during emergency situations.

The CPP Rate will only apply to customers who voluntarily choose to opt-in and participate in a program, such as the planned smart thermostat program, or who accept the storage incentive.

Open Access Transmission Tariff

SMUD CEO & General Manager Paul Lau also released the Chief Executive Officer & General Manager’s Report on Open Access Transmission Tariff (OATT). The approved changes revised SMUD's OATT to ensure SMUD's transmission rates for certain ancillary services reflect current costs.

Read the OATT Report

SMUD rate changes beginning in 2020 include an increase in rates and other changes.

Customer resources

• View the General Manager's Report
• View Addendum 1 of the Report
• View Addendum 2 of the Report
• View the updated draft rate resolution
• Download the fact sheet
• Public input process FAQs

How will this impact my bill?

For residential customers, bill impacts will depend on how much electricity customers use each month. The average residential customer will see an increase of about $4.94 per month in 2020 and an additional $6.38 per month in 2021.

Additional changes

• A restructure of commercial rates to better improve consistency of bill components.
• Updates to language in the green energy rates to allow them to be updated more frequently as legislation changes.
• Updates to language related to the Time-of-Day Rate (TOD) to reflect the completed transition to TOD as the standard rate for residential customers.
• Clarifying language regarding the Power Factor Waiver.
• Miscellaneous language updates to certain Rules and Regulations.

Grid Access Charge update

After careful consideration, SMUD has withdrawn the Customer Renewable Self-Generation Grid Access Charge proposal, including the July 1, 2019 grandfathering deadline and the Net Energy Metering (NEM) 2.0 rate schedule.

Businesses and other non-residential customers will see rate increases that apply to energy charges, the System Infrastructure Fixed Charge, Site Infrastructure Charge, Summer Peak Demand Charge and other rate charges.

How will this impact my bill?

Bill impacts will depend on how much electricity customers use each month. Below are sample 2020 bill increases. 

Rate restructuring

The changes include a rate restructure for commercial customers to better align with the cost of providing electricity when it is used and the fixed costs of maintaining the infrastructure and service that supports a reliable grid. The rate restructure includes:

• Changes to the Time-of-Day time periods to better reflect the cost of providing service, which fluctuates based on the time of day.
• Adjustments to the fixed charges to ensure enough collection of the fixed costs for providing service to all customers.
• Consistency of bill components across all commercial rate classes.

If approved, the restructure will start in 2021 with a up to 8 year transition plan, depending on customer rate class, to minimize bill impacts.

Time periods

While SMUD commercial customers have had time-based pricing for many years, the existing time periods no longer align with SMUD’s costs to serve electricity. An accurate time-based rate structure has a higher price per kWh when electricity is most expensive to provide and a lower price when it costs less to provide.

Aligning rates to costs gives customers the opportunity to manage their usage and bills, while helping reduce peak energy use and the need to buy power from less environmentally sustainable and more expensive sources.

Time-of-Day time periods

Consistency across rate classes

To improve consistency of bill components for commercial rate classes, the changes includes increasing the System Infrastructure Fixed Charge, the Site Infrastructure Charge and the Summer Peak Demand Charge, which will be offset by a decrease in the energy charges per kWh.

The changes also include adding the Summer Peak Demand Charge to several rate categories, as well as gradually introducing a monthly demand charge to customers who use less than 20 kW per month, such as small offices and strip mall stores (GSN_T rate class).

Time-of-Day

While SMUD commercial customers have had time-based pricing for many years, the existing time periods no longer align with SMUD’s costs to serve electricity. An accurate time-based rate structure has a higher price per kWh when electricity is most expensive to provide and a lower price when it costs less to provide.

We’re adjusting the time periods to better align with the cost of providing electricity as shown by the image to the right.

Aligning rates to costs gives customers the opportunity to manage their usage and bills, while helping reduce peak energy use and the need to buy power from less environmentally sustainable and more expensive sources.

Fixed charges

 The change includes an increase in fixed charges, including the System Infrastructure Fixed Charge, Site Infrastructure Charge and the Summer Peak Demand Charge. These increases are offset by a decrease in energy charges.

Grid Access Charge update

After careful consideration, SMUD has withdrawn the Customer Renewable Self-Generation Grid Access Charge proposal, including the July 1, 2019 grandfathering deadline and the Net Energy Metering (NEM) 2.0 rate schedule.

Changes to EAPR Rate

Sometimes, paying your energy bill can create a financial hardship. Life circumstances can change for all of us, and we want to help ensure that you continue to have access to safe, reliable energy.

The Energy Assistance Program Rate (EAPR) makes electricity more affordable for qualified low-income customers by providing discounts on monthly bills. Beginning in 2019, we will be phasing in a restructuring of this program so it better serves customers with the greatest need.

For customers at the lowest ranges of the Federal Poverty Level (FPL), energy bills tend to take up a larger portion of household income. The result can contribute to long-term economic hardship. Addressing energy affordability can have a positive impact on household finances.

The changes align the monthly discount with household income. Customers with the lowest household income, based on the federal poverty level, will receive the largest discount. EAPR customers with a household income between 0% and 100% of the Federal Poverty Level (FPL) would receive the largest monthly discounts. EAPR customers with a household income between 100% and 200% of the FPL would receive smaller discounts than those with incomes between 0% and 100% of the FPL.

To help with this transition, the changes will be phased in over several years. SMUD will assist customers with education and energy efficiency programs to help save energy in their homes to further reduce their energy bills. We’ll also invest in energy efficiency upgrades for customers most in need. These improvements will make a significant lasting impact by raising the overall energy efficiency of local housing.

Monthly maximum EAPR discount

Amounts are based on how your income compares to the Federal Poverty Level and can include a discount on energy use as well as a $10 System Infrastructure Fixed Charge discount. View the current monthly discounts

Economic Development Rate

To increase and extend the EDR to attract, retain and help businesses expand in the region, we adopted a 10-year contract period for the EDR since most businesses looking to relocate consider a planning horizon of 10 years. Other recommendations include requiring a customer to certify that a discount on electricity would have a meaningful impact on their business and that the cost of electricity is part of the decision when choosing a location.  A third party will verify both certifications. Additional changes include the following to make it easier to qualify:

• Remove the industry requirements so that all industries may qualify for the EDR
• Remove the minimum jobs requirements
• Remove the “Full service from SMUD” requirement to allow customers to receive power from solar or other distributed energy sources

Following are the discount options for the EDR, including a higher discount for businesses in disadvantaged communities. 

Economic Development Rate discount options 

Economic Development Rate discount options for disadvantaged communities

Rule and Regulation 16

To further encourage economic development, we adopted offsetting the fees charged to businesses for required SMUD infrastructure for new or upgraded electric service to their business. View Rule and Regulation 16 (Rule 16.)

Changes to residential rates

We will prorate the System Infrastructure Fixed Charge (SIFC) for bills with less than 27 days of service so customers pay it proportional to the number of days their home received power from SMUD.

Other changes

The Hydro Generation Adjustment (HGA) language has been modified to increase the cap on the Hydro Rate Stabilization Fund (HRSF) from 5% to 6% to better account for fluctuations in precipitation, as well as set a precipitation cap for the HGA transfer calculations. Additionally, minor language changes related to certain tariff sheets and rules and regulations have been implemented.