Sacramento Utility District residential ratepayers will see an average 2.5 percent increase in their power bills come 2014. It is to be followed by another 2.5 percent hike in 2015, under a rate package the muni\u2019s board of directors approved unanimously Aug. 15. \tLooking longer term, ratepayers also will see a phase-out through 2017 of the current tiered rate structure\u2014in which rates climb as usage increases\u2014in favor of time-of-use rates beginning in 2018. They also face an end to what muni officials called cross subsidies between rate classes, for instance, non-solar households covering fixed costs avoided by solar households under the current rate structure. \tExplaining the change, muni general manager John DeStasio said it\u2019s doubtful tiered rates really have resulted in much energy conservation by customers, which was their original purpose. He said the task ahead is to support customers in choosing new services\u2014like solar rooftops\u2014while at the same time maintaining the integrity of the muni\u2019s grid. \t\u201cWe\u2019re in the midst of a transition,\u201d he said. As part of the shift, he said the muni must eliminate cross-subsidies so there are not \u201cwinners and losers.\u201d \tBy adopting the rate revisions, board chair Bill Slaton said the muni is \u201csetting the stage for the future.\u201d \tMuni director Larry Carr observed that the rate package is needed to accomplish multiple tasks the public power agency faces, including shifting to renewable energy, dealing with customers who now can install their own onsite solar systems, maintaining credit-worthiness, protecting low-income customers, eliminating cross subsidies without \u201csticker shock,\u201d and encouraging local economic development. \tObjections to the proposal centered around eliminating a current subsidy for 18,000 homes that are electrically-heated and do not have natural gas service, as well as a new $14\/month fee for solar homes to recover fixed costs now covered by other customers. \tEnvironmental groups and solar companies opposed the new fee, saying it would undercut the economics of residential solar. While a staff analysis indicated that the new fees would have only a \u201cmild\u201d effect on how solar pencils out, Solar City representative Andy Schwartz told the board the company has reached \u201ca wildly different\u201d conclusion. \tDirector Michael Picker countered, noting that it might be time to adopt a specific solar tariff for residential solar homes, but he cautioned against using the general rate structure to subsidize the technology. \tAt the same time the rate action will institute the fee, it also will expand availability of net metering from solar systems to virtually all renewable energy systems. It further eliminates subsidies for people with private wells. \t\u201cIt\u2019s time to position ourselves to see that all customers are treated the same,\u201d said Slaton. \tMeanwhile, director Genevieve Shiroma said the muni in the years ahead would continue to work on developing time-of-use rates, refining rates for solar, and developing ways to incentivize energy efficiency. \tThe rate changes take effect Jan. 1.