Did your energy bill skyrocket last month? Energy bills have gone up and customers are noticing!

If you want to understand what’s going on, the first step is to understand that most energy bills in our area reflect two energy sources: natural gas and electricity. (Some bills also show electricity generation from a rooftop solar system.)

The second step is to determine which appliances and equipment in your home use natural gas and which ones use electricity.

Most people heat their homes with natural gas-powered furnaces, so gas price increases are most noticeable in the winter. Most people cool their homes with electric air conditioners, so electricity price increases are most noticeable in the summer.

Space heating and cooling is generally the biggest energy draw in homes in our area. We live in a relatively temperate climate, but heating and cooling can still translate into big bills.

Know your gas rates: winter is the high season

The market for natural gas is under pressure and natural gas prices keep going up. Although natural gas rates have been going up steadily since last December, we didn’t feel it fully until this winter, when we all turned on our furnaces to heat our homes.

If you compare the natural gas rates for December 2020 (January 2021 bill) and December 2021 (January 2022 bill), you can see the total of the increases over that period. Rate increases in both baseline and second tiers have significantly affected the natural gas portion of your bill, which is found nearly at the end of a very long bill (with electricity up front).

Gas rates: December 2020

Tier 1 – 1.61890 per therm within the baseline allowance

Tier 2 – 2.13754 per therm

Gas rates: December 2021

Tier 1 – 2.02574 per therm within the baseline allowance ($0.41/therm increase)

Tier 2 – 2.50798 per therm ($0.37/ therm increase)

Because December this year was slightly colder than last year, you might also have seen slightly more usage, pushing you into Tier 2 rates.

According to an article on the PG&E website, in “PG&E’s service area in Northern and Central California, natural gas market prices from November 2021 to January 2022 are 90% higher than last winter. And it’s not just a California concern. Prices globally are even higher, with European natural gas prices up over 400% over last winter. PG&E passes the cost of energy purchases — both gas and electricity — to its customers with no mark-up. What customers pay for the fuel costs is what PG&E pays.”

During the winter, you might see electric bill increases as well. These are directly related to shorter days resulting in increased use of indoor lighting and more time indoors resulting in more use of electronic devices.

Get ready for what’s next! Additional electricity rate increases for 2022

Both PG&E and Valley Clean Energy (VCE) have recently approved electricity rate increases. (Remember, VCE does not supply natural gas; customers must buy natural gas from PG&E alone. It’s also important to remember that although VCE and PG&E provide different services to you, the bill for both is combined into one.) Valley Clean Energy is the locally governed not-for-profit electricity provider for Davis, Woodland, Winters, and unincorporated Yolo County. (Customers in these areas may switch to VCE from PG&E for electricity only, and, with VCE, you may opt up to UltraGreen to receive electricity from 100% renewable sources. Read your energy bill carefully if you’re not sure if you’re already a VCE customer.)

PG&E will implement an electricity rate increase for 2022 of 33%. The VCE board matched that increase at a recent board meeting. Part of that decision included an additional 2.5% discount on generation rates (DISCOUNT PERCENTAGE CORRECTED 3/8/22) (CARE/FERA /Medical baseline) for low-income VCE customers that rely on special medical equipment. The VCE staff report noted that the Public Utilities Commission, on January 24, 2022, approved PG&E implementing its new rates, effective March 1, 2022.

Electricity rates for our area on a tiered plan

Electricity rates for EV1 Time-of-Use rate plan (for homeowners with an electric vehicle).

PG&E cites a number of factors in increasing rates and additional natural gas–based energy production:

  • Retrofitting delivery systems to protect against wildfire
  • Drought impacts that reduce water power sources
  • Increased heat extremes leading to increased use of air conditioning in spring summer and fall

Since a large portion of PG&E power still comes from burning natural gas at power plants any increasing costs of natural gas are also incorporated in regular increases in electricity rates.

Are there assistance programs to help me with my bills?

YES! Visit our www.cooldavis.org/waystosave webpage for details.

What can I do to protect my household in the face of these continued rate increases?

  • Homeowners can increase home energy efficiency
    • Install higher efficiency appliances
    • Replace all lighting with LED lighting
    • Replace natural gas appliances and equipment with all-electric
    • Take advantage of new rebates for all-electric systems (see cooldavis.org/waystosave scroll down to Home Energy Efficiency Incentives)
    • Make sure your heating (and cooling) systems are working efficiently: schedule maintenance visits; clean or replace filters
  • Renters can encourage landlords or property managers to take advantage of new TECH Clean California rebates to improve energy efficiency in their buildings and replace natural gas appliances. Read our new Heat Pump FAQs, for details and links for residential properties with more than 5 units.
  • Everyone can adopt energy conservation practices.
  • PG&E Recommends:
    • “Save 2% on your heating bill for each degree you lower your thermostat, for example, lowering your thermostat (health permitting) from 70 to 65 degrees can save 10% on your heating bill.
    • Set your water heater thermostat at 120 degrees or lower to save about 10% in water heating costs for every 10% lowered.
    • Reheat leftovers in a microwave instead of an oven – it uses 80% less energy.
    • Home Energy Checkup identifies sources of wasted energy and gives you a personalized savings plan.
    • Home Intel is a no-cost energy savings program that provides an energy audit and a personal energy coach.”

If you’re still struggling to understand what’s going on with your bill

What about Time-of-Use?

Adding to the confusion and frustration that some customers are feeling, the state asked utility companies to begin moving their customers to TOU (Time-of-Use) rates over a two-year time period from 2020 to 2022. Locally, many PG&E and VCE residential customers in our area received their transition to Time-of-Use letters in January, with a transition date of April 2022.

What is Time-of-Use?

Under a Time-of-Use rate, there are different rates at different times of the day based on the demand for energy at that time. Electricity is priced high at high demand times, generally between 4pm and 9pm daily, and lower when power is abundant, but demand is lower.

Why are we being asked to switch?

Because we, as a state, have invested more in renewable energy, more energy is available between sunrise and 4pm and less is available during peak demand in the evening. TOU rates help us all make better decisions about when to engage in activities requiring high energy use. When we shift our electricity use to another time of day, we save money and likely use more energy from renewable sources (like the sun).

The customer transition over to TOU is scheduled to be completed by the end of 2022. According to PG&E, “customers are notified 90 days in advance that their electric service will transition to the Time-of-Use (Peak Pricing 4-9 p.m. every day) rate plan.” Customers are automatically switched unless they decide to stay on their current rate.

VCE is anticipating completing the switch of all remaining customers in April 2022.

PG&E and VCE are allowing households to stay on their current rate plan, pick another rate plan that is best for their household, or elect to transition to Time-of-Use. You can sign into your online account with PG&E to compare the price of different rate plans.

TOU Bill Protection

According to a VCE, TOU Update prepared for the VCE Board meeting February 10 2022, “PG&E is providing Bill Protection that requires that the customer stay on the TOU rate for 12 months. After 12 months on the TOU rate, customers are credited back any additional money they spent on the TOU plan compared to E1. VCE staff are analyzing the impacts of providing Bill Protection for newly transitioning TOU customers. If implemented by VCE, Bill Protection implementation would be done by SMUD.”

The VCE Board will make a decision about Bill Protection at their next meeting March 10, 2022. Residents may attend the (virtual) meeting to provide feedback by visiting the VCE website.

More information available on the upcoming VCE Board Meeting

Sources

Quote from PG&E comes from this article on their website.

https://www.pgecurrents.com/2022/01/20/pge-offers-wide-variety-of-resources-to-reduce-energy-usage-costs/

PG&E Time-of-Use (Peak Pricing 4-9 p.m. Every Day) rate plan

Read a full description of the PG&E Time-of-Use transition and a VCE TOU Update

VCE TOU Update prepared for the VCE Board meeting 22-02-10