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CPUC Issues Draft Decision on Dynamic Pricing
By Dan Geis
December 2009
After months of deliberation, the California Public Utilities Commission has issued a draft decision on the implementation of “dynamic pricing” for customers that will follow the installation of new SmartMeters. Dynamic price rates will charge very high energy charges for certain days of the year that will experience very high temperatures and tight energy supplies (ie very hot days). Notices will be given to customers the afternoon before the “call” is made. PG&E will be limited as to how many dynamic pricing days they can “call” in a year.
The decision may affect all PG&E customers with demand over 200 kW, as well as all existing non-Time-of-Use (Non-TOU) rates. The final decision, when issued within the next few months, will likely be expanded to customers of Southern California Edison in the coming year or so.
In brief, the draft decision makes two important determinations in relation to agricultural and water pumping customers of PG&E:

All accounts with demand over 200 kW will be placed on default dynamic pricing schedules 12 months after receiving a SmartMeter, beginning in Spring 2010. These customers may choose to opt out of this default rate switch and remain on their current rate schedule. They will be notified by PG&E at least a few months prior to the switch, and given the opportunity to opt out of the transition.
All existing Non-TOU customers, 12 months after receiving a SmartMeter, will be required to move to a TOU meter under a different rates schedule (likely AG-4A) beginning in early 2011. Based on data accumulated during this case, AECA believes that this migration will result in a net rate decrease for the vast majority of agricultural and water pumping customers currently on Non-TOU rates.
Existing TOU meters with demand less than 200 kW will not be effected at this time.
However, the estimation that moving these non-TOU customers to TOU rates is based on limited data, and AECA has already submitted comments to the Commission to ensure that the migration of customers may be halted if the analysis proves untrue and these customers realize adverse rate impacts.
A final decision is expected from the Commission by March of 2010. AECA has already submitted testimony, briefs and comments on this issue and will continue to monitor the implementation of SmartMeters.

Contact the AECA by E-Mail
Agricultural Energy Consumers Assocation
925 L Street, Suite 800 / Sacramento, CA 95814
(916) 447-6206