SDG&E Gets New Time-of-Use Pricing in Dec 2017

California Public Utility Commission SETS NEW TIME-OF-USE PERIODS FOR SDG&E TO REFLECT CHANGING ENERGY MARKET

Figure 1.   CAISO from 8/21/2017, Eclipse Day
Showing Actual Demand in Blue
and Net Demand in Green (Net is Actual minus Renewables)

In moves to change electricity rates in California to better reflect the impacts of solar power on the grid, CPUC has allowed San Diego Gas and Electric utility time-of-use rates.    This starts no earlier than December, 2017.   As shown below, electricity will cost more during the peak period of 4-9 pm, but will cost much less during the spring off-peak demand period.   The revised rates do not result in more money to the utility in a given year.   The rates simply change how much money is collected from the various rate groups.    The intent is to reduce usage during daily peak periods, to avoid running expensive peaker power plants that increase everyone’s utility bills.   This will also give financial incentive for home and business battery-storage systems that can be charged with cheap off-peak power, then discharged to prevent purchasing expensive on-peak power from 4-9 pm.   

With most office-style businesses open until 5 p.m., and many that have a 9-80 working schedule open until 6 p.m. on most days, the final one or two hours each day will have expensive electricity.  

Part of the discussion at CPUC was the beneficial impact that voluntary electricity reduction had on the day of the eclipse, 8/21/2017.   As shown in Figure 1 above, the grid demand did decline between 10 a.m. and noon.  However, the eclipse peaked at around 10:30 a.m.   What seems likely is that millions of Californians left work or their homes from approximately 10 a.m. to noon.

The CPUC press release is shown below:

California Public Utilities Commission 505 Van Ness Ave., San Francisco ____________________________________________________________________________________ FOR IMMEDIATE RELEASE PRESS RELEASE Media Contact: Terrie Prosper, 415.703.1366, news@cpuc.ca.gov Docket #: A.15-04-012  

Link at:  http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M194/K665/194665543.PDF

or click here. 

The document from CPUC states:

"CPUC SETS NEW TIME-OF-USE PERIODS FOR SDG&E TO REFLECT CHANGING ENERGY MARKET

SAN FRANCISCO, August 24, 2017 - The California Public Utilities Commission (CPUC) today established new time-of-use periods for San Diego Gas & Electric (SDG&E) to reflect the changing energy market, including a later on-peak period and a spring super-off-peak period. In adopting an uncontested settlement agreement that allocates SDG&E’s revenue among its different customer classes (residential, small business, commercial, industrial), the CPUC also adopted an onpeak time-of-use period of 4-9 p.m. Time-of-use pricing utilizes a rate structure that varies depending on the time of day during which energy is consumed, with higher rates charged when electricity demand or costs are higher. “Solar energy has become an important part of our clean energy grid. We saw how it changes the way we use energy last week during the eclipse. And we also saw the benefit to the grid and avoided use of gas generators when customers took action to avoid using electricity during the sun’s short break and while solar output dropped,” (note, see Figure 1) said CPUC President Michael Picker, the Commissioner assigned to the proceeding. “During hot summer months, our peak period during late afternoons has also changed significantly. The best evidence shows that the optimum time to avoid using electricity is now from 4 to 9 p.m. That’s why we move to shift SDG&E’s time of use rate structure to meet that same span of time.”

The proposal voted on is available at (see link)  http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M194/K473/194473384.PDF.

“Summary (of the linked Proposal)

This decision addresses the application of San Diego Gas & Electric Company (SDG&E) to establish marginal costs, allocate revenues, and design rates for service provided to its customers. The uncontested Revenue Allocation Settlement Agreement is approved; the contested Schools Settlement Agreement is not adopted. This decision establishes new time-of-use periods to reflect the changing energy market, including a later on-peak period and a spring super-off-peak period, while affirming the grandfathering provisions for eligible solar customers previously established by the California Public Utilities Commission and extending the Eligibility Grace Period for schools. 

The decision establishes cost recovery of distribution costs between coincident and noncoincident demand charges based on the original testimony position of the Solar Energy Industries Association and retains the current split for generation capacity costs between coincident demand and volumetric charges. The decision establishes a three-year temporary waiver of the small commercial rate load limit for current small commercial accounts where electric vehicle charging load makes up at least 50 percent of their electric load. Unless otherwise provided in this decision, the revised rates will become effective no earlier than December 1, 2017 and will allow SDG&E to collect the revenue requirement determined in Phase 1 of its 2015 General Rate Case. 

This proceeding is closed.”

Roger E. Sowell, Esq.

Marina del Rey, California
copyright (c) 2017 by Roger Sowell - all rights reserved

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