Southern California Edison (SCE) is one of the largest utility companies in both California and the United States. Based in Rosemead, they provide natural gas and electricity to about 15 million people in the southern part of the state.
Many electricity customers throughout the country receive their electric bill every month and pay it without really diving into the details of what they’re actually paying for…and we’re here to help break it down. In this article, we’ll review the most important parts of a SCE electricity bill, and how that changes once you install solar panels.
How SCE calculates your monthly electricity bill
There are two important factors in determining how much you’ll owe on your electricity bill: your electricity usage and your rate plan/schedule.
How much electricity you use in a given month is calculated in kilowatt-hours (kWh). This number may change significantly from season to season based on your consumption habits – many people use more electricity during summer months when they run their air conditioning units, and will see lower electricity bills during colder months. It’s important to keep track of how your monthly electricity usage changes over time, rather than just looking at the overall cost of your bill. Seeing that your electricity bill is increasing because of an uptick in consumption (which you can control), rather than changes to utility rates, gives you the opportunity to change your behaviors and save money.
Understanding your electricity consumption is also important because of SCE’s baseline allowance: the number of kWh of electricity you can consume before you begin to pay a more expensive rate for electricity each month. Baseline allowances vary by area and season, but generally, it’s a good idea to be as energy-efficient as possible to maximize your chances of remaining in Tier 1 (therefore paying the lowest rate possible).
Next up, rate plans: you may or may not know which rate plan you’re on (or even that you have the opportunity to change it). Many utility companies have default rate options for their customers that remain in place unless you proactively make changes.
SCE offers plans that not only vary in pricing, but in structure: two of the most common types are a tiered-rate plan and a time-of-use plan.
If you’re on a tiered-rate plan (e.g., Schedule D), you’re charged a fixed rate for each kWh of electricity you use until you pass your baseline allowance; the more electricity you use, the higher the tier, and the more you’re charged for each kWh of electricity.
SCE’s time-of-use (TOU) plans, on the other hand, charge a different rate for electricity depending on the day, time, and season. This type of rate structure is called a “time varying rate,” since the cost of electricity varies based upon the time that you use it. You can benefit from lower rates during times when demand for electricity is lower (morning and late at night), but pay more during “peak hours” when demand for electricity is high (evening hours).
Lastly, if you own an electric vehicle, SCE offers a EV rate plan known as TOU-D-PRIME. This plan encourages EV or plug-in hybrid car owners to charge their vehicles overnight when the overall demand for electricity is low. You can save a lot of money by charging your car during these off-peak hours, as opposed to during the day or immediately after work when rates are at their highest.
For more information on SCE’s current plan offerings, visit their website.
Types of electricity bill charges
Electricity bills tend to have a lot of confusing terms and line-items, making it difficult to identify the all-in rate you’re paying for electricity. However, most of these line items can be categorized into three separate buckets: supply, distribution/transmission, and miscellaneous. These rates cover the electricity you use, getting the electricity to your home or business and any other charges and fees related to the maintenance of the grid.
It’s easiest to think of supply charges as paying for the actual electricity you use. You can see all of your supply charges on the section of your SCE bill labeled “Generation charges.”
Utilities across the country charge different amounts for electricity supply depending on the power plant it comes from and the cost of the fuel (i.e. coal or natural gas). As of 2019, a lot of electricity delivered by SCE comes from renewable energy resources (35.1 percent), however, they also deliver a fair amount of energy generated from natural gas (16.1), nuclear power plants (8.2 percent) or unspecified sources of power (32.6 percent).
Importantly, you may notice that SCE delivers electricity to your home, but you’re paying someone else for supply: California has a partially deregulated electricity market, meaning other entities, outside of utility companies, have the opportunity to procure and sell electricity. Community choice aggregation (CCA) programs, which are becoming increasingly popular in California, allow local governments to aggregate electricity purchases for their constituents. Many towns do this as a way to deliver cheaper, cleaner electricity to the area. If you see a different company or organization mentioned in the supply section of your bill, this may be your town’s CCA provider.
Distribution and transmission
Distribution and transmission charges, sometimes referred to as delivery charges, are fees from SCE to send you the electricity. The utility company uses these charges to build and maintain poles and electrical wires that deliver electricity from power plants to your property. You can think of the delivery charge as effectively the same as paying for shipping and handling on any product you buy online.
On your SCE bill, you will see your distribution and transmission charges on the third page under “Delivery charges.”
In addition to paying supply and demand, utility companies often have a number of miscellaneous charges. Some of these are charges mandated by the state to help fund statewide initiatives. For example, if you live in a state with energy efficiency goals or a renewable energy mandate, a fraction of your bill charges may go to supporting clean energy programs. Some examples of this for SCE customers are the nuclear-decommissioning charges (which go towards making nuclear power plants safe to shut down) and public purpose program charges (which go towards funding energy efficiency and low-income programs). Additionally, most utilities, including SCE, also charge a customer fee: this is a bill charge that is unrelated to the amount of electricity you use in a given month. For SCE, the charge is a fixed rate per day of service over a given billing cycle.
What will my SCE bill look like after going solar?
After you install solar panels, you will continue to receive your monthly electricity bills from SCE. Each month you need to pay your non bypassable charges (NBCs), which are fees required to stay connected to the grid.
In addition, the monthly bill includes a summary of your Generation and Delivery charges. These charges will take into account any solar credits you receive via net metering. Net metering is a solar incentive that allows you to claim credits for any excess solar electricity you send to the grid. You can use these credits to counterbalance what you pull from the grid at times when your solar panel system isn’t generating enough electricity to meet your needs (like at night).
As a new solar customer in California, you will be required to go on a time-of-use (TOU) plan to take advantage of the state’s net metering 2.0 (NEM 2.0) program. Under this plan, the value of your solar credits depends on the time of day you send it to the grid, and whether that was during peak hours (when electricity is most expensive) or off-peak hours (when electricity is the most affordable).
In both your delivery and generation charges summary, you will see separated charges for On peak, Off peak, and Super off peak usage. If you see negative numbers here, those represent credits you can carry forward. Positive numbers indicate that you drew more electricity from the grid than your solar panel system produced, so you’ll have to pay SCE for that electricity.
However, even if your monthly bill includes a net positive usage, you don’t necessarily have to pay it yet – all SCE customers have an option to receive an Annual Billing Statement. This is a bill you’ll receive once a year that summarizes the total money you owe to SCE, accounting for how much electricity your solar panel system exported to the grid and how much you drew from the grid over the course of 12 months.
If you send more electricity to the grid than you consume during this period and have a negative balance on your annual billing statement, you will see a line item for Net Surplus Energy Compensation (NSC). Effectively, SCE takes any excess credits that you didn’t use over during your annual billing period and pays them out at a lower, wholesale rate (known at the net surplus compensation rate). You can either use this monetary credit during your next billing period, or request to receive the balance as a check.
Save on your SCE bill with solar
Many SCE customers already save on their electricity bill thanks to solar–and you could be next! Please contact Lifestyle Energy at (855) 533-5848 to learn more.