The new utility rate hike is in full effect, and now that we are a few months into the new year, customers are beginning to see the increased energy costs showing up on their energy bills. Whether you and your family have a modest or substantial energy bill, that nearly 13% rate increase means you’re paying on average $30+ dollars a month more for the same power.

We’ve discussed this rate hike before, and will continue to do so as more proposed rate increases are slated for this year, as we believe that utility customers have a right to know how much these unnecessary price hikes will hit their finances. However, sometimes, spreading awareness about an issue isn’t enough; in a case like this, it helps to see exactly what that increase looks like. To help you understand the impact of the utility rate hike, we’re going to take a look at some real energy bills and outline exactly how the price of power has increased for California residents.

The Utility Rate Hike - Bill Comparison

To demonstrate the specific impact of the 12.8% utility rate hike that was recently passed, we’re going to look at a real utility customer's energy bill, and examine the impact that the recent changes have had on utility bills between last year and this year. We’ll also continue to check in with these increases as we see them play out throughout this year, especially as at least one more rate increase is known to be coming, and a second one is rumored to be in the works.

With February being a shorter month than January, the rate increase may be balanced out for some customers by the shorter pay period, resulting in a bill that looks normal for average users. Those with higher energy bills will still see the net increase in their payment, so we will continue to check in on this front to show the 12.8% increase in action. However, when we look at the increase in pay period year over year, the difference becomes quite clear.

Here, we can see just how much this energy bill has gone up between a similar usage and weather period last year to this year. While the increase in energy usage between these two periods is small, the price increase is quite large. Not much has shifted between the weather and usage patterns for this household, and yet they are paying $69 dollars more for the same power. Is a few kWh more power really worth more than a 50% increase in cost? For those paying around this much, it’s a headache to have to budget for larger energy bills, and for those who use more power, that utility rate hike really starts to add up.

Historical Rate Increases

If we investigate energy rates over time, the reason for this large leap in cost becomes more apparent. The customer above is on a specific rate - the tier 1 rate. This isn’t even the highest cost rate available, so as you’ll see the utility rate hike hits other homes even harder.

As you can see, this chart demonstrates the rate increase experienced by the previous bill comparison between last year and this year, with the tier 1 rate increasing from 34.1 to 42 cents per kWh. If rates had stayed consistent for the above customer, their energy bill would have been roughly 50 dollars lower for the same power purchased a year later. That increase is, crucially, without the new 12.8% increase, so we will see that number continue to climb over this year.

Now, there’s an even more costly rate out there, the tier 2 rate. Here’s how their costs have increased annually for the same product.

They were already paying last year what we are paying now, and their rate has only gone up since then. It is important to note that the utility wanted the current energy rates to be higher than they are now - it is only through compromise that we aren’t currently paying even more for power. That being said, the utility is eager to pay returns to shareholders, and cover costs incurred by overbid maintenance, so they aren’t content to leave rates where they are now.

Break the Cycle with Solar

The only way for customers to meaningfully escape the utility rate hike is with solar + storage. Onsite energy generation and storage allows you to dodge the high price of power by making your own to use when the cost of electricity fluctuates. Customers can expect a marked reduction in their monthly bills, not to mention a consistency of payment that the utility simply cannot offer. Once the system is paid for, you’ll enjoy reduced energy bills for the life of your system, and you won’t have to worry about whether or not the utility is planning even more rate hikes for us this year.

Reach out to one of our expert consultants to get started, and avoid the utility rate hike once and for all!