The California Public Utilities Commission has restructured the electricity rates for households served by Pacific Gas and Electric Co. to help us meet our clean-energy goals and make rates fairer. This is a complicated but important issue for consumers, and that is one reason that the CPUC is holding a public forum on rates at Fresno City Hall on Tuesday at 6 p.m.
When rates for low-usage customers were frozen in 2001 under legislative direction during the energy crisis, the CPUC increased the number of tiers – blocks of increased power used monthly – in residential rates from two to five. Over time, with the lower-tier rates frozen, the five-tiered rate structure was unleashed from the actual costs of power, and imposed ever greater inequities on households that consumed energy in the expensive upper tiers, which are disproportionately comprised of large families.
California needed rates that were fairer and would allow us to prepare for an increasingly carbon-free electric grid in the future. We also needed a simple and flexible design to help us make a wide range of our other policies more effective, such as Net Energy Metering and energy efficiency. No rate design works by itself to prompt people to make energy efficiency upgrades or install rooftop solar. Consumers need information, and there have to be simple and effective actions that work and are within their means to accomplish. But we need a rate design that is flexible enough to support the programs that will get people to save energy and use clean power.
Our new design will flatten rates over time and eventually transition to time-of-use rates that better reflect the significant differences in providing electricity at times of high demand. Customers will be able to save money by reducing total usage and by avoiding the expensive times of the day. We are setting new goals and requirements for the utilities to work with their customers as partners to understand and respond to these rates, and not just treat their customers as passive consumers.
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The CPUC’s commissioners ultimately determined that the new rate design structure is the best way to move forward into a world with more renewables and a more flexible grid to support cleaner power, while being fairer to all customers. This restructuring is another step toward meeting California’s ambitious climate change policies and will facilitate more renewable energy on our electric system. As new technologies emerge, we may need to make additional changes to support consumer choice and a cleaner, nimbler and more reliable grid.
At our forum at Fresno City Hall, consumers will hear from the CPUC about the new rate design, including the requirement that starting in 2019 all residential customers will be offered time-of-use rates as a default. There will be opportunity for consumers to provide comment and ask questions of the CPUC’s commissioners and staff.
I look forward to seeing Fresno-area residents at the forum to discuss and answer questions about the impacts and benefits of the new rate design.
Michael Picker was named president of the California Public Utilities Commission on Dec. 23 by Gov. Jerry Brown.
Forum on rates
Tuesday: 6 p.m., Fresno City Hall