PG&E To Experiment With Costs on Peak Demand Power

PG&E will ask the California Public Utilities Commission (PUC) for approval of a pilot program that would change the power rate structure for participating customers.

The utility is due to make the request in August at a PUC meeting, said PG&E spokesperson Donald Cutler. The new system would go to a “time of use” (TOU) billing, in which consumers would pay more for their power between 4 p.m. and 9 p.m. It is the peak demand period in summer, when customers in hot areas run their air conditioners.

TOU would not turn off any electricity supply, but if rates go up, it could discourage some people from using the electricity.

At other times of the day, the rates would be lower. The pilot project would select 250,000 customers in northern and central California. It would begin in March 2018 and last for one year.

As part of the pilot, PG&E would test different methods of alerting customers on how the switch to TOU would take place. The firm during the pilot period would also work on variations of rate designs for TOU.

TOU is used by some businesses and government agencies that want to save money by pulling in their power at non-peak times.

Cutler said that the power business is changing, with more solar power coming on-line. PG&E wants to keep up to date with such changes.

The pilot program was the result of a request by The Utility Reform Network (TURN), said its executive director, Mark Toney.

TURN has several criticisms of the PG&E switch to TOU. One focused on the fact that there was no hard data about how it would affect rates. Another related to PG&E’s desire to make customers opt out should they not want to participate. TURN says it’s better for customers who want to have TOU to opt in. PG&E would assume they are in, unless they say otherwise, said Toney.

TOU may be a good thing for people who have the ability to cut use between 4 p.m. and 9 p.m.. However, there are many people who cannot cut back, because air conditioning is too important in hot climates. “It can make life more difficult for the elderly, or parents with young kids at home, or people who are hungry when they get home from work. If they want a cool house, they will be upset when they see their bill skyrocket, because they want to eat dinner, and have a cool home,” stated Toney. People leaving their pets at home also want to be sure they stay cool all day.

TURN told the PUC that it wants to see hard data on how rates will be determined, andwhat the cost will be. The pilot program is supposed to do that, said Toney.

PG&E says that people will be able to drop out of the program at any time. “But how will they know? Will there be a hotline? Or do people push a big button?, Toney asks. “We’ll push them to make it easy for people to opt in, instead of having to opt out.”