Doing the math on your PG&E bill
I’ve kept up with the coverage of SmartMeters, the new meters installed by Pacific Gas and Electric Company that some people blame for doubling and tripling their electric bills. PG&E says it’s a combination of a rate increase and a heat wave that resulted in this year’s larger bills. Personally, I moved this year, so I don’t have any data points of my own. So I decided to look at the publicly available data to see what the rate increase and heat waves have meant.
I also looked at one factor that hasn’t come up — the fact that your heat source in the winter affects how much you pay in the summer.
Hotter, but not by much
Using data from the National Weather Service, I tallied “cooling degree days” for May to September each year. (I excluded October because it’s not over yet.) Cooling degree days are a standard measure of how much you need to cool your house. Take the average temperature for a day, and each degree it’s over 65 degrees is a degree day. Here are the cooling degree days for the last three years.

As you can see, 2009 was not especially warmer than the past two years. July was extra-warm, but June and August were cooler than in the last two years. Overall, cooling degree days were up 5.4 percent in 2009 over 2008.
But, are cooling degree days a good measure? What does 65 degrees have to do with Bakersfield summers? So I created something called adjusted cooling degree days. It works exactly the same, except that it uses 78 degrees as the base. I chose that number because PG&E’s energy saving tips include lowering your thermostat to 78. If it’s 77 outside, no need to run the AC. (Well, except for your oven, fridge and lights giving off heat inside. But still.)
Here’s what that looks like:

It makes 2009 look warmer — that July again — but note the overall smaller scale of numbers. Season-long, the summer was only 3.5 percent warmer than last year. July was up 24 percent, but June and August were down 26 percent and 28 percent, respectively.
So, yes, kind of warmer. Your bills for July should have been way up. If you only noticed that and didn’t notice that your June and August bills were down, then you’d be mad about bills. But that’s not the whole story.
Energy costs more
Now, there was also a rate increase this year. PG&E rates are higher this year than they were last year. Ironically, last year we got a rate cut — 2008 rates were lower than 2007. Year to year, rates for a 3000-kWh bill are up 20.5 percent, but over the last two years, it’s just 16.7 percent.
(Also, it turned out the rates were too high, forcing PG&E to refund some of its customers’ money. It’ll refund $424 million, and that money will be apportioned based on how much electricity you used in the higher tiers — more than 130 percent of baseline. That translates to how much of your monthly bill was over $65 if you have gas heat, or $95 if you have electric heat. See the section below on what winter means to summer.)
Of course, your rates depends on how much electricity you use. Here are what your bills would be, based on how much you used in a month. (I assumed a 30-day month here.)

As you can see, the more you use, the bigger your percentage increase this year. The higher you are over your “baseline” amount, the more you pay. It’s kind of like income tax, where you pay a higher rate on the 100,000th dollar you take in than on the 30,000th or the first.
Put them together
So things were hotter, and more expensive. Multiply them together, and you’ve got … well, let’s take July. Up 24 percent year over year. Let’s take someone who used about 2,400 kWh in July 2008. Adjust for the weather, and they’d use about 2,975 kWh in July 2009. Last year, they paid $579. This year, they paid $958. That’s a 65 percent increase, year-over-year.
In June, though, 2,400 kWh last year, adjusted for weather, means 1,725 kWh this year. That translates to last year’s bill being $579 and this year’s $409 — a 29 percent drop, even after the rate increase is factored in.
Of course, that assumes that if a month is 24 percent hotter, you run your AC 24 percent more. Is that valid? I don’t know. Many pages on the Web say it is; others imply that heating degree days are directly proportional to energy use, but cooling degree days are less so. This page suggests that cooling degree days don’t take into account the effect of direct sunlight. However, the fairly constant nature of Bakersfield’s clear skies suggests to me that it would be constant year-over-year.
What winter means for summer
Here’s something nobody else has brought up, though: Your summer baseline amount depends on how you heat your home in the winter. If you use gas to heat your home, your summer baseline is lower, and thus you pay more for the same electricity than someone with electric heat. Really! A 3,000 kWh user, this year, pays 17.5 percent more if they have gas heat instead of electric heat.

I’ve asked the state Public Utilities Commission why this is, and after more than a week I am still waiting to hear the policy rationale. My guess is that if you use gas in the winter, then PG&E makes less money off you in the winter to cover their fixed costs — transmission wires, employees, shareholder dividends — so they make up for it with a higher summertime bill.
Sources: Temperature data is from the National Weather Service; rate data is from PG&E.
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Best job I’ve seen yet in explaining the PG&E rate increase in a rational, non-emotional manner. Thanks, James.
So from the numbers used for the months of he June/July of ‘08 & 09″, by using 100kwh less of electricity you paid $220 more! Wow, where do I get in line?! With PG&E though, one not worry this is a once in-in-a-lifetime opportunity