Business & Real Estate

SMUD removes ‘solar surcharge’ from customer bills

Workmen install solar panels on the roof at the historic Governor's Mansion in Sacramento on Friday, October 16, 2015.
Workmen install solar panels on the roof at the historic Governor's Mansion in Sacramento on Friday, October 16, 2015.

The Sacramento Municipal Utility District said Wednesday that it has removed the state-mandated “SB-1 solar surcharge” from all customer bills.

The surcharge dates back to former Gov. Arnold Schwarzenegger’s “Million Solar Roofs Initiative,” a surcharge SMUD said is currently equal to $0.0016 per kilowatt-hour of electricity usage, or about $1.20 on an “average” SMUD customer monthly bill. The surcharge was initiated in 2008.

Effective Jan. 1, SMUD initiated a previously approved rate increase of 1.5 percent for all residential customers in 2018 and a 1 percent increase in both 2018 and 2019 for all commercial customers. SMUD said the current average monthly bill for a customer using 750 kilowatt-hours of electricity is $109.88. The 1.5 percent increase will boost that by $1.62 a month.

With the removal of the SB-1 solar surcharge, SMUD said the average residential customer using 750 kilowatt-hours per month of electricity will now see an average net increase of about 42 cents a month (the $1.62 average increase minus the average $1.20 SB-1 solar surcharge). Removing the surcharge from business customer bills will, on average, offset the entire 1 percent rate increase, SMUD said.

The utility said the recently initiated rate increases will be used for upgrades for a modern energy grid and to meet customer needs. The increases also will go to improve technology that SMUD customers use to monitor and manage their energy use.

Funds from the solar surcharge were used to help develop residential and commercial solar capacity throughout SMUD’s service area.

The utility said the funds helped build approximately 125 megawatts of solar generation over the past 10 years. That includes incentives for residential and commercial customer solar installations, Smart Home developments and SolarShares developments.

Recent fund use included $1.4 million awarded to the Sacramento International Airport to support its installation of two new solar arrays with 6.8 megawatts of 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, SMUD said.

Per the state mandate, SMUD said the SB-1 solar surcharge was in effect until SMUD had collected $130 million. SMUD said it reached that cap in late December and immediately removed the surcharge from billings.

SMUD said it has disbursed approximately $125 million of solar funds to date and will disburse the remaining funds by the end of 2020.

For more details on SMUD rates, see

Mark Glover: 916-321-1184, @markhglover

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