PALM SPRINGS, Calif. — How much Californians pay for electricity could soon depend on when they use it — and some could see their summer bills go up substantially.
The California Public Utilities Commission could soon ask Southern California Edison and other utility companies to start designing "time-of-use" residential electricity rates, to take effect in 2019. The rates would make electricity more expensive when demand is high, and less expensive when demand is low.
Some ratepayer advocates and environmental groups support time-varying rates, which they say would help reduce dependence on climate-altering fossil fuels. But at least one consumer watchdog group is worried the rates would have unintended consequences. For instance, the new rates could make electricity much more expensive during the summer, hitting desert residents hard during the many months of air conditioning season.
It's no secret that the cost of providing electricity changes depending on the time of day, and the time of year.
For Edison and other utilities, powering the state's homes and business is more expensive when overall energy demand is high, in part because they're forced to buy electricity from expensive "peaker" power plants that wouldn't otherwise be needed. Demand tends to peak in the afternoon and evenings, and on hot summer days.
"It sends better price signals about the real impact that people's consumption will have on the grid, depending on the time that electricity is used," Scott Murtishaw, an energy adviser to public utilities commission President Michael Picker, said last month.
It's not clear how many customers would pay more and how many customers would pay less under time-of-use rates, in part because so much of that depends on whether people change their behavior. State officials are trying to design the rates in such a way that overall electricity costs stay the same.
"The utility is still going to collect the same amount of money," said Mike Campbell, project manager on electric pricing at the public utilities commission's Office of Ratepayer Advocates. "When your change rates, you're changing from whom the money comes."
