Rate change FAQ
Our 2021 Chief Executive Officer & General Manager’s Report and Recommendations on Rates and Services outlines a:
- Proposed rate increase of 1.5% effective March 1, 2022 and 2% in January 1, 2023 for all customers.
- New rate for customers that add solar and/or solar and battery storage on or after January 1, 2022.
- New voluntary Critical Peak Pricing (CPP) rate to help meet summer peak energy demand in times of greatest need.
Please find answers to common questions about our proposed changes and the rate change process below.
What is the proposed rate increase?
The proposal includes a 1.5% rate increase effective March 1, 2022 and a 2% rate increase effective January 1, 2023 for all residential and non-residential customers.
Why does SMUD need to raise rates?
We work hard to control costs and operate as efficiently as possible. The proposed rate increases are well below the forecasted rate of inflation and support SMUD’s commitment to keeping rate increases at or below inflation through 2030.
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.
How would the rate increase impact customer bills?
For residential and non-residential customers, bill impacts will depend on how much electricity is used each month.
The average residential customer (who uses 750 kWh per month) will see an increase of about $1.91 per month in 2022 and an additional $2.57 per month in 2023.
Customers on our low-income Energy Assistance Program Rate (EAPR) and the Medical Equipment Discount Rate (MED Rate) will see slightly lower bill impacts than standard rate customers, depending on their discount qualification and energy usage.
Is SMUD doing anything to help customers minimize the impact of the proposed rate increase?
Yes. We offer a variety of resources to help customers manage their energy use and their bill.
We offer rebates, free shade trees, free home weatherization for low-income customers and other programs and services designed to help you manage your energy use and reduce your electric bill. We have energy-efficiency programs for residential and business customers.
Customers on our Time-of-Day Rate can use our Time-of-Day Cost Estimator to see how shifting the use of household appliances can help lower your bill.
We also offer My Energy Tools online to help you see how you’re using energy and what it’s costing you. Then you can use the customized tips to help you save. Plus, you can set bill alerts to help keep you on track with your energy use and budget.
How do SMUD’s rates compare to other California electric utilities?
As a community-owned, not-for-profit electric utility, our rates are among the lowest in the state and will remain so even with the proposed rate increases.
On average, our electric rates are more than 36.5 percent lower than those of neighboring PG&E. As a result of SMUD’s lower rates, our customers saved about $812 million in 2020. Other utilities with higher rates than SMUD include Modesto Irrigation District, Southern California Edison, Los Angeles Department of Water & Power and San Diego Gas & Electric and many others.
The proposal includes a new Solar and Storage Rate for customers approved to connect to SMUD’s grid on or after January 1, 2022.
The proposed rate structure and supporting programs and incentives will transform the market from solar only to solar and storage because of the greater value and broader benefits pairing solar with storage brings to all customers. The proposed rate is the outcome of extensive collaboration with representatives from the solar and storage industry that began in 2019.
Here are key details about the proposed rate:
- 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 buyback rate would be effective January 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 January 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.
If I already have solar, will this new rate impact me?
Customers that already have solar will have a choice. If the proposal is approved by SMUD’s Board, solar customers on the existing Net Energy Metering (NEM 1.0) rate can remain on that rate through 2030. This includes all SMUD customers adding solar and approved to connect to SMUD’s grid before January 1, 2022.
However, a customer that already has solar will have the option to take advantage of incentives to add battery storage, at which time they will transition to the proposed Solar and Storage Rate.
Does SMUD support solar?
Yes. For over 30 years, we’ve played a critical leadership role in providing early support and incentives to grow the rooftop solar industry into the thriving and growing industry it is today. In fact, we’ve invested about $250 million to support customer adoption of rooftop solar over the past 20 years.
The cost of solar has significantly decreased and storage technology has advanced enough that it’s now time to transform the industry to a solar PLUS storage one, which is more valuable to all customers, SMUD and the community. With our new proposed rate and programs, we plan to invest about $25 million over the next 9 years to incentivize storage adoption, which also plays a critical role in achieving our goal to remove all carbon from our operations by 2030.
In addition, nearly 1,000 MW of new utility-scale solar will be pursued locally over the next 20 years. SMUD’s utility scale solar will be provided to all customers, even those that can’t afford or can’t install rooftop solar.
These local utility-scale solar projects will positively impact local air quality in the greater Sacramento region and help us achieve our carbon reduction goals.
Why is SMUD proposing a new rate for solar?
If we want to build a zero-carbon economy, improve health outcomes, decrease asthma rates and decrease pollution in our region, then we must find a comprehensive and balanced rate approach that benefits everyone.
The incentives and our Solar and Storage Rate do that by promoting the adoption of clean power that eventually will allow us to close gas-fired power plants, expand solar to lower-income customers, provide a new market for battery storage as well as new clean energy jobs and more.
How did SMUD determine the proposed solar and storage rate?
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.
What is the Critical Peak Pricing Rate?
Time-of-Day Rates remain the standard for all customers. The 2021 GM Report proposes a new Critical Peak Pricing (CPP) Rate option for residential customers effective June 1, 2022.
The CPP Rate is designed to allow our customers to help reduce demand on our grid during times when there are emergency conditions with the power system or energy demand is at its highest. Customers who voluntarily participate in the CPP Rate will be asked to reduce their energy usage 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 any time of the day during the summer months (June – September), including weekends and holidays, but may only be called once per day. 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.
If the CPP rate is approved by SMUD’s Board, it may be implemented under a name other than Critical Peak Pricing.
Will the CPP Rate apply to everyone?
No, it is an optional rate. The proposed CPP Rate will only apply to customers who voluntarily choose to participate in a program, such as the planned smart thermostat program, or who accept the storage incentive. Customers with existing battery storage installed at their home may also enroll in this optional rate. Customers that have accepted a storage incentive under the Solar and Storage Rate program are required to enroll in this rate for at least 1 year and will be subject to the Solar and Storage Rate terms and conditions.
SMUD will work closely with customers and other stakeholders — including community groups, service organizations, business groups, elected officials and more — to discuss these changes. Customers can:
- Read the Chief Executive Officer and General Manager’s Report and Recommendations
- Email questions or comments to ContactUs@smud.org or call 1-855-736-7655.
The Board will make a decision on the proposed 2021 Rate Action on September 16, 2021.
Customers can learn more about the process and comment on the proposed changes at the following meetings. All three meetings will be held virtually.
- Thursday, July 8 at 5:30 p.m.
- Tuesday, July 27 at 10 a.m.
- Tuesday, August 31 at 5:30 p.m.
Making public comments during Public Workshops
We value your comments and have created several options to ensure your voice is heard:
- General public comments or comments on a specific element of the presentation may be emailed to PublicComment@smud.org. Your comments will be provided to the Board and placed into the record of the meeting if they're received within 2 hours after the meeting ends.
- While a meeting is in progress you can make comments by emailing PublicComment@smud.org. Please limit your comment to 250 words or less. Your comments may be read into the record based upon factors like the length of the agenda and the number of comments received. Comments will be provided to the Board and placed into the record of the Public Meeting if they're received within 2 hours after the meeting ends.
- Members of the public may register to provide verbal comments at an upcoming Public Workshop by emailing a request to speak to PublicComment@smud.org. Please include the date/time of the meeting and your name. The request may also be submitted while the meeting is in progress. Individual comments will be limited to 3 minutes unless granted an extension at the meeting at SMUD’s discretion. Pre-registration is strongly encouraged.
- Meetings are currently conducted virtually via Zoom due to the COVID-19 pandemic. Members of the public may log into the Zoom; however, functionality will be limited to listen- or view-only unless a request to speak has been submitted.
What happens at the public workshops?
SMUD staff holds workshops to obtain feedback from the public about the 2021 GM Report. Members of the public may ask questions at any of the public workshops.
Although members of the Board may attend these public workshops to observe, they are not scheduled Board meetings and the Board members do not participate in the discussion.
What if I have questions about the rate proposal?
Members of the public may ask questions at any of the public workshops. Questions may also be submitted in writing to ContactUs@smud.org.
SMUD staff will typically respond to such written questions within 5 business days (questions received after 5:00 p.m. will be considered received on the next business day). However, SMUD staff will notify the customer in the event that complex questions require additional time.
Because SMUD staff engages in a significant amount of public outreach, it’s not feasible to post every question received throughout this rate process. However, SMUD will compile a list of frequently asked questions and post them on this webpage.
Is there a deadline for submitting questions?
Questions may be submitted in writing up until 5 business days prior to the public hearing scheduled for August 31, 2021. Questions can be submitted to ContactUs@smud.org.
How can I provide written comments on the rate proposal?
Written documents, including alternative rate proposals, on the rate proposal in the 2021 GM Report may be submitted to ContactUs@smud.org at any time up until the Public Hearing date, August 31, 2021.
On August 31, 2021 we expect the Board to issue a draft rates resolution containing its proposed rate resolution and the basis for that decision. The release of the draft rates resolution will open up a formal comment period. Unless otherwise instructed by the commenter, SMUD will post any written documents received that are directly relevant to the rate proposal on its website.
What happens at the public hearing on August 31?
On August 31, beginning at 5:30 p.m., the Board will conduct a Public Hearing on the rate proposal. The Board will also consider any written alternatives to the rate changes proposed that are submitted by any member of the public.
At the conclusion of the Public Hearing, the Board will vote on whether to issue a draft rates resolution containing its proposed rate decision and the basis for that decision.
If the Board issues a draft resolution, the resolution will be made available for public review and comment for at least 10 calendar days.
How can I participate at the public hearing on August 31?
Any member of the public may speak on the draft proposal for up to 3 minutes, unless the Board President in his or her discretion extends the speaking time.
You may present non-duplicative comments, recommendations and alternatives for the Board’s consideration.
Those with presentations on alternatives to the rate changes proposed that need longer than 3 minutes must notify SMUD in writing at least 10 calendar days prior to the August 31 Public Hearing and indicate the amount of time requested up to 20 minutes.
To ensure adequate time for all interested persons to provide public comment, the Board President may, in his or her discretion, grant additional time up to 20 minutes. Written materials must be submitted 5 business days prior to the Public Hearing.
What happens at the September 16 meeting?
The Board is scheduled to vote on the proposed rates resolution on September 16, 2021 at its regularly scheduled meeting which begins at 5:30 p.m.
If the Board approves the rate resolution, the rate process is concluded. The rate changes, however, would become effective on the dates outlined in the GM’s Report. For example, if approved, the 1.5% rate increase will be effective on March 1, 2022.
What if the Board proposes modifications which would change customer rates or billing to the proposed resolution?
If the Board proposes material modifications to the proposed rate resolution, the revised resolution will be made available for public review and comment for at least an additional 10 calendar days. The public will have an opportunity to provide public testimony on the modified resolution prior to any Board action.