In this case, SDG&E is proposing changes to the structure of its standard Schedule DR residential rate, with the goal of reducing the upper-tier rates that apply to the residential customers who use the most energy. SEIA opposes the changes that SDG&E is proposing –most importantly, SDG&E’s proposal to replace its residential minimum bill with a fixed monthly customer charge of $3.00 per month and its proposal to combine its upper Tier 3 and Tier 4 rates into a single Tier 3 rate.

In its recent order in the Pacific Gas and Electric (PG&E) general rate case (GRC), D. 11-05-047, the Commission squarely confronted its policies concerning residential rate design, with PG&E and others expressing the same concern about residential rates that SDG&E has expressed in this case. D. 11-05-047 rejected PG&E’s proposed $3.00 per month customer charge, and the Commission maintained a four-tier,increasing-block rate design for PG&E.

SEIA submits that SDG&E has provided no reasonable grounds to depart from the rate design policies adopted in the PG&E case. The Commission should moderate SDG&E’s residential rate design proposal in order not to undermine the state’s key policy goals of strongly encouraging both energy efficiency measures and the development of distributed generation (DG) sources such as solar. The Commission should maintain the existing SDG&E four-tier rate structure for Schedule DR, and should keep the current differential of $0.02 per kWh between the Tier 3 and 4 rates.