Some 5,650 MCE customers in Marin County have opted to participate in a new Pacific Gas and Electric Co. pilot program that will allow them to lower their electricity bills by shifting more of their energy usage to times when demand for electricity is lower.
By the same token, if program participants don’t alter their usage or increase their use of electricity during peak-use periods, they could see their electric bills increase.
PG&E rolled out its new time-of-use rate plan to 150,000 residential electric customers across its service area in January. These PG&E customers have until the end of this month to opt out or select an alternate rate plan; otherwise, they will be enrolled in the program automatically.
During the first 12 months, customers who enroll in the program will receive bill protection. If by the end of that year they have paid more than they would have on their former rate plan, PG&E will credit them with the difference.
MCE’s board of directors voted earlier this month to allow its customers to participate in the program by establishing its own comparable time-of-use rates with similar pricing signals for peak and off-peak periods as provided by PG&E. As of March 1, MCE’s basic rate was a fraction of cent lower than PG&E’s, resulting in a typical cost savings of about 2.5 percent, according to MCE. The authority’s new time-of-use rates preserve that cost advantage.
MCE supports the time-of-use program, said Justin Kudo, deputy director of account services at MCE, power aggregrator formerly known as Marin Clean Energy.
“There is a need to reduce electricity use during the highest point of strain on the grid,” Kudo said.
Kudo said significantly more renewable power, particularly solar power, is available to the nation’s electrical grid during the day, when demand is lower.
“What we’ve seen over the last several years and expect to see in the future is a reduction in supply as we hit the evening hours, along with significantly increased demand as residents return home and start using electricity at home,” Kudo said.
Kudo said PG&E’s installation of “smart” meters, which proved controversial in many Marin communities, paved the way for the time-of-use rates.
PG&E uses a tiered-rate structure that varies based on the total amount of electricity a customer uses each month. The more electricity a customer uses, the higher the rate. What many customers don’t realize is that the electricity they use in the morning and evening costs more to generate than the electricity produced during the day.
The new time-of-use rates adopted by PG&E and MCE allow customers to choose for themselves which of two periods will be billed at the peak rate, 4 to 9 p.m. or 3 to 8 p.m.
If granted final approval by the California Public Utilities Commission, PG&E is expected to begin using the new time-of-use rates to bill all of its customers by late 2019 or 2020.
“We believe that customers should have a choice,” said Mindy Spatt, spokeswoman for the Utility Reform Network in San Francisco. “We’re very opposed to this being imposed on all customers on a default basis, which is the utility’s eventual plan.”
“The concern we have about time of use rates is that customers who do their best to conserve may actually see an increase in their bills, whereas large users may actually see a decrease,” Spatt said. “That is what our analysis points to.”