CPUC Proposal Makes 2006-07 ‘Transition’ for Peak Pricing

By Published On: March 24, 2006

Instead of holding large consumers’ feet to the fire this summer for gobbling up electricity during high demand, a California Public Utilities Commission proposed decision would postpone new high peak rates. Mid-2006 to mid-2007 would become transition years to mandated peak pricing. The proposal would have utilities offer bill protection to consumers for the first year of new rates. Customers could choose to convert to a time-of-use rate, where the price fluctuates. The ruling would require utilities to send customers a bill analysis, including price differences if consumers reduced consumption during peak hours. The pricing would apply to customers with demands of 200 kW and above. The impact of the proposed decision is unclear at this time. Representatives of the targeted large consumers either had not read the proposal or did not return requests for comment by press time. The idea of using peak rates is to discourage use during times of high demand and low supplies (Circuit, Sept. 16, 2005). If peak consumption can be shaved, the cost of building new power plants needed to serve that excess may be avoided. The two settlement proposals that were rejected include one by Pacific Gas & Electric and Southern California Edison; and one by San Diego Gas & Electric. The joint utility settlement would have had a voluntary peak price structure rather than a default rate, but only applicable to certain classes. The rates would range from 50 cents/kWh to 75 cents/kWh. SDG&E?s proposal would have applied to all customers with loads of 200 kW or more.

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