The growth of renewable energy production has led Southern California Edison to make a change in its rate structure to reflect the changed times of day when energy production is at its lowest cost.
The change affects those customers on the utility’s time-of-use plans, when rates vary by the time of day to reflect the costs of energy production and use at those times.
In a switch, the least expensive periods for energy production from October to May are now from 8 a.m. to 4 p.m., when renewable energy such as solar power is abundant. The peak time, when rates are the highest, is from 4 to 9 p.m.
“When the sun goes down, we have to supplement the needs of our customers with gas-powered generation,” said Russell Garwacki, SCE director of pricing design and research.
Where the catch phrase for energy efficiency was once to “give your appliances the afternoon off,” Edison is now advising customers to do the opposite, and use the morning and early afternoon for energy-intensive tasks.
“We’re really trying to encourage customers to see what they can shift to during that period,” said Andre Ramirez, SCE principal advisor for pricing design and research.
Changing use patterns not only saves money, but also helps to manage the energy grid, Garwacki said.
The state produces so much renewable energy during the middle of the day that it exports it elsewhere at times.
“We would obviously prefer not to do that,” he said.
Business customers have been on the time-of-use plans for many years, first with the largest users, but now with all business customers thanks to electronic meters that make such precise readings cost-effective, Garwacki said.
These business customers saw their rate structure switch on March 1.
Residential customers may choose to enroll in the time-of-use program at any time. Edison provides an online rate comparison tool which uses individual customers’ usage data to see if a switch to time-of-use would be of benefit.
For residential customers, the tool may be found at www.sce.com/rateplantool.
For business customers, the tool is at www.sce.com/ratetool.
The program comes with one year of bill protection for those residential customers that switch to time-of-use, in which the utility will credit the account for the difference if it turns out the switch results in higher costs than they would have experienced on their prior plan. This is “effectively a risk-free trial period,” Garwacki said.
In October 2020, the utility will begin shifting residential customers to the time-of-use program automatically, although they may still opt out if they so choose.
Programs offered to help low-income customers will apply to either the time-of-use or the existing tier rate structures.
The change in the time-of-use rate structure took several years to put in place, and is the first such change in about 30 years, Garwacki said.
“We don’t change those time-of-use periods lightly,” he said.
It is expected the new plan will remain effective at least through 2024.
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