NewEnergyNews: ORIGINAL REPORTING: California utilities prep nation's biggest time-of-use rate roll out

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    Wednesday, May 22, 2019

    ORIGINAL REPORTING: California utilities prep nation's biggest time-of-use rate roll out

    California utilities prep nation's biggest time-of-use rate roll out; Over 300 time-varying rates in 62 pilots have shown consumers can "understand and respond," but California’s three IOUs are dealing with more than 20 million people.

    Herman K. Trabish, Dec. 6, 2018 (Utility Dive)

    Editor’s note: It is too soon for news on the California TOU rate rollout but the utility world is watching.

    Many utility tests of time varying rates have led to billORIGINAL REPORTING: California utilities prep nation's biggest time-of-use rate roll out savings and lower peak loads, but California has begun the biggest test yet by putting over 20 million consumers on time-of-use (TOU) rates. Properly designed and deployed TOU rates can help customers save money by shifting their use away from high-priced time periods. The rates can help utilities reduce their expenditures by lowering the highest demand they must meet. And TOU rates often move customer use toward periods when low cost renewables are in greater supply on utility systems, which saves costs for customers and utilities. The challenge in designing TOU rates is aligning the high prices for customers with high system costs and low prices for customers with low system costs. The challenges with deploying TOU rates are in helping customers understand them and in using the price signals to get customers to pay attention to when they use electricity.

    In 2015, in response to a number of successful pilot programs, including a landmark Sacramento Municipal Utility District (SMUD) 2012 to 2014 TOU rate pilot, the California Public Utilities Commission (CPUC) ordered the state's three investor-owned utilities (IOUs) to transition to "default" rates by 2019, requiring customers pay TOU rates unless they opt out. San Diego Gas & Electric (SDG&E) began moving its customers in March, and Southern California Edison (SCE) and Pacific Gas & Electric (PG&E) were given until October 2020 in order to prepare their billing systems. SMUD began another system-wide rollout of default TOU rates in October 2018. A dozen or more states are working on TOU rates, which charge more for electricity when it costs more to deliver. If customers shift their usage to the lower cost times, they can lower their bills and utilities can see lower peak demand. A Brattle Group Principal Ahmad Faruqui. But Brattle's survey of customer responses to over 300 time-varying rates in 62 pilots shows sufficiently prepared customers "understand and respond" to TOU rates… click here for more

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