Review of California's Proposed Commercial Time of Use Electricity Tariffs

In 2019, both Pacific Gas & Electric (PGE) and Southern California Edison (SCE) will introduce new Time-of-Use (TOU) periods for commercial tariffs. Both utilities are moving highly-priced peak hours later in the day, from mid-afternoon to 4-9 PM. If you are selling solar, storage and/or energy efficiency in California, you want to be sure to calculate savings using these new tariffs. Thanks to Genability’s new Proposed Tariffs product for enterprise customers, now you can!

New Time of Use Periods and Volumetric Charges - SCE

SCE is expected to introduce their new TOU periods in March of 2019.  Headlining the changes are a shift of the On-Peak (Summer) and Mid-Peak (Winter) periods from Noon - 6 PM later in the day to 4 PM - 9 PM.  This moves the highest priced periods outside of the peak hours of solar production.

Further impacting solar customers, SCE has also introduced a matinee Super Off-Peak period in the winter from 8 AM to 4 PM, covering nearly all of the solar production during those months. Also of note, current TOU-8 Options A and R will become Option E, and current Option B will become Option D.

Upcoming per kWh price changes for TOU-8 (below 2 kV) - Weekdays, Solar Hours in** Bold**

New Time-of-Use Periods and Volumetric Charges - PG&E

PG&E will introduce new TOU Periods in the fall of 2019, making changes similar to SCE.  The changes start with a shift of the season definitions, moving from 2 seasons to 3.

The new Spring season for PG&E has a matinee Super Off-Peak period (9 AM - 2 PM).

In addition, the On-Peak (Summer) period will shift from mid-day (12 - 6 PM) to evening (4 - 9 PM), with a similar change for Part-Peak in Winter, shifting from the extensive 8 AM to 9 PM currently, to the shorter 4 PM to 9 PM period in late 2019.

Upcoming per kWh price changes for E-19 (Secondary) - Weekdays, Solar Hours in** Bold**

The biggest price change for E-19 comes in  the hours from Noon - 2 PM in the month of May.  Under current rates, these hours are priced as Summer On-Peak (14.4¢/kWh).  Under the proposed rates, these hours would shift to Spring Super Off-Peak (5.6¢/kWh), dropping the per kWh rate by over 60% for those two hours.

Changes in Demand Charges

Similar to consumption (kWh) charges, demand charges (kW) for both utilities will also conform to the new seasons and TOU periods. Whereas SCE & PG&E made similar changes to volumetric charges, their updates to demand rates are significantly different, as described below.

Southern California Edison Demand Changes (TOU-8)

SCE has dropped their Maximum demand charge in every month by over 20%, but has compensated by adding a Winter Mid-Peak demand charge that replaces almost all of those costs in the winter months. 

The picture in the Summer is a bit more complex, with the On-Peak demand charge increasing nearly 8%, while the current Mid-Peak demand charge of $3.63 is getting eliminated.  On balance, demand charges decrease under the proposed tariff.

Pacific Gas & Electric Demand Changes (E-19)

PG&E will raise its Max Demand rate by 11%, while keeping its Summer On-Peak nearly identical.  It will drop the Summer Part-Peak demand charge by 40%, while dramatically increasing the Winter/Spring Part-Peak demand charges.

The overall impact is a slight increase in demand charges for PG&E, despite the new season structure dramatically lowering demand charges in May and October.

Impact on Solar Savings

It’s obvious that the upcoming changes in TOU periods for both SCE and PG&E will reduce solar savings for commercial and industrial customers, but by how much? Genability set out to answer that question by modeling a 1 MW solar system in both PG&E and SCE territories, under the current and proposed tariff structures. Here’s some of what we found.

SCE TOU-8 (below 2 kV) with a Large Office load profile and 1 MW system (60% offset)

PG&E E-19 (Secondary) with a Large Office load profile and 1 MW system (60% offset)

As you can see, the Avoided Cost of Power (ACP) will drop significantly for both utilities under the new rate structure, when evaluating just solar.  The demand savings from the tariff switch remain quite similar (~ 5% decrease in savings), for both utilities. But the savings on consumption charges have been reduced dramatically by the new time of use structures, with the impact most notable for SCE, where a 60% offset of the customer’s load reduces consumption charges by only 15%.

Want more?

Contact your account administrator to check if you have access to our new Proposed Tariffs.  Happy analyzing!