SMUD removes state-mandated SB-1 solar surcharge from customer bills
Average residential customer bill will be reduced by $1.20
SMUD has removed the state-mandated SB-1 solar surcharge from all customer bills. Part of Governor Schwarzenegger’s “Million Solar Roofs Initiative,” the surcharge—currently equal to $0.0016 per kilowatt-hour of electricity usage or about $1.20 on an average SMUD customer monthly bill—was initiated in 2008.
Funds from the surcharge were used to help develop residential and commercial solar capacity throughout SMUD’s territory. Overall, the funds will have helped build approximately 125 megawatts of solar generation over the last ten years. This includes incentives for residential and commercial customer solar installations, Smart Home developments, and SolarShares™ developments. A recent example of how these funds were used is the $1.4 million awarded to the Sacramento International Airport to support their installation of two new solar arrays totaling 6.8 megawatts in capacity. The arrays produce enough electricity to handle approximately one-third of the airport’s power needs, saving the airport approximately $850,000 in energy costs each year.
Per the state mandate, the SB-1 solar surcharge was in effect until SMUD had collected $130 million. SMUD reached that cap in late December and immediately removed the surcharge. SMUD has disbursed approximately $125 million of these funds to date and will disburse the remaining funds by the end of 2020.
Per earlier approval by SMUD’s Board of Directors of the Chief Executive Officer & General Manager’s Report & Recommendation on Rates and Services, a rate increase of 1.5 percent for all residential customers and 1 percent for all business customers took effect on January 1, 2018. With the removal of the SB-1 solar surcharge, the average residential customer using 750 kilowatt-hours per month of electricity will now see an average net increase of about $0.42 per month ($1.62 average increase due to the rate increase less an average $1.20 SB-1 solar surcharge). Removing the surcharge from business customer bills will, on average, offset the entire 1 percent rate increase.