Utilities apply to revise their time-of-use electricity rates

The California Public Utilities Commission will be deciding on applications that would affect agricultural customers' electricity rates. At issue is how and when the utilities' time-of-use periods should be revised in response to changing patterns of California's electric generation and customers' demands for electricity.

Three separate applications—one each for San Diego Gas & Electric Co., Pacific Gas and Electric Co. and Southern California Edison Co.—are being considered as part of each utility's application to the CPUC to modify the default time-of-use periods for non-residential customers.

Karen Norene Mills, California Farm Bureau Federation associate counsel and director of public utilities, said Farm Bureau is advocating in each case for keeping agricultural electricity costs to a minimum, adding, "Within the framework of the proceedings, we are working with the utilities to develop pragmatic solutions and time for customers to adjust to what are significant changes to how electricity is priced during the day."

Agricultural electric customers were first encouraged and then mandated to take service on time-of-use, or TOU, rates. In some cases, the mandated transition to TOU rates occurred as recently as this year, Mills said.

Customers have made investments to adapt their operations to the long-established TOU periods, where the noon to 6 p.m. on-peak time period is the highest-cost time frame, whereas weekends and evenings are off-peak, or the lowest-cost periods, Mills explained.

"The new time periods have nearly reversed that structure, creating significant changes," Mills said. "The data showing how the electric system demand has changed over the last several years is clear. But it is also clear that customers must have time to adapt these changes to their operations, which does not happen overnight."

Mills noted that where extended hours are needed for irrigation sets, agricultural customers have adapted their operations to pump during periods of the low-cost, off-peak weekend pricing.

"The CPUC encourages customers to respond to price signals, but realistic options to do so must be available to customers. Agricultural customers have specialized demands on their operations that must be considered," she said.

Each of the utility cases is being considered separately, but the implementation dates proposed by the utilities for the new TOU periods would come soon—as early as 2017 for SDG&E and 2018 for PG&E and Edison. In each case, however, the on-peak periods switch from midday to either 4 p.m. to 9 p.m. or 5 p.m. to 10 p.m. None of the utility proposals provides for off-peak periods throughout the entire weekend. Although the midday hours become off-peak periods, they are bracketed by hours with much higher rates.

Unless a customer is able to turn the usage on and off throughout the day, Mills said, the midday, off-peak periods would be eclipsed by the higher-cost periods.

Edison spokesman Ron Gales recognizes there are potential hurdles for agricultural customers in adapting to the new time periods.

"In starting or restarting irrigation after the on-peak period to take advantage of the off-peak pricing, customers could face challenges in checking irrigation systems for leaks in the dark of nighttime hours," Gales said.

Mills said Farm Bureau has been working collaboratively with PG&E for consideration of a specialized schedule that would allow continual off-peak usage during an extended, pre-designated period, in recognition of unique operational constraints.

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)