SDG&E Time-Variant Pricing

Background

In July 2010, SDG&E submitted an Application requesting CPUC approval to implement:

  • Time-of-Use rates and default Critical Peak Pricing rates for its small non-residential customers
  • Optional Critical Peak Pricing for residential customers, prior to the summer of 2013. 
  • $118 million to implement the aforementioned new rate schedules and to conduct customer education and outreach.

Time of Use (TOU) is a rate in which the price of electricity varies by preset usage periods (e.g., time of day, day of week, season). Critical Peak Pricing (CPP) is a dynamic ate that allows a predetermined short-term price increase to reflect system conditions expected on the following day.

In June 2012, consumer groups and SDG&E filed a joint consensus Settlement urging the CPUC to protect customers through guidelines, evaluation, and outreach including:

  • Provide SDG&E $93 million in implementation costs.
  • Roll-out optional TOU & CPP programs in March 2013.
  • Roll-out default TOU for small commercial customers in March 2014.
  • Bill protection for 1-2 years for TOU and CPP customers, respectively.

In December 2012, the Commission denied the Settlement but adopted some key elements in the Final Decision:

  • SDG&E may recover only $93 million in implementation costs.
  • Roll-out optional TOU & CPP for both small commercial and residential customers in November 2013.
  • Roll-out mandatory TOU and default CPP for small commercial in November 2014 -  customers cannot opt out to a flat rate.
  • One-year customer bill protection for customers switched to either a TOU or a CPP rate option.
  • Adopt the rest of the consumer protection terms by reached in the Settlement.


ORA Position

ORA urged the CPUC to deny SDG&E’s requests because:

  • SDG&E did not sufficiently support their outreach plans or Information Technology (IT) upgrade plans. 
  • SDG&E’s Critical Peak Pricing (CPP) proposals are too complex for small customers to understand and the utility should begin with simpler TOU rates in order to give customers time to adjust to the concept of Time Varying Price (TVP).
  • SDG&E’s application and testimony are deficient in not providing an estimate of the Demand Response benefits that can be expected from the new rates it proposes.

See ORA's February 18, 2011 Testimony on SDG&E's Dynamic Pricing Application.

ORA's November 26, 2012 Joint Reply Comments on the CPUC's Proposed Decision.

 

Proceeding Status

See the Proceeding docket.