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Peak Day Pricing Begins for Large Commercial PG&E Customers

In a program designed to reduce California’s peak afternoon grid demand, the CPUC this month moved about 2,000 PG&E customers – large commercial power users with a demand over 200 KW – to a new pricing structure that charges more in summer afternoon hours, and less in off-peak hours.


The state’s peak summer demand forecast is expected to be 47,139 megawatts, lower than the 50,270 megawatts of four years ago. Rooftop solar already produces over 2.5% of California’s sunny afternoon electrons for the grid, which has reduced the peak summer afternoon demand over the last few years.

The change will provide an incentive for hotel chains, large manufacturers, school districts, hospitals and some office buildings to consider the many available alternatives that would move their power demand to off peak times.

Some examples include using night power to supply daytime air conditioning or adding solar that typically produces the most power during peak times, thus offsetting their peak load.

This policy greatly improves the already good economics now for solar for commercial users, whether investing in their own solar system, or simply contracting for the solar power itself, using a power purchase agreement (PPA) with a company that builds a solar system for them. Most companies that have added renewable energy have saved money.

These customers can opt out of the new rate if it is not possible to shift their peak load, but by default, beginning this month, they are in the new PG&E Peak Day Pricing program. For customers able to alter their energy usage, the new rate could reduce their electricity bills, the CPUC says.

California has kept growth in electricity demand on the grid in check since the ’70s with a variety of incentives, building codes, appliance efficiency standards and electricity rate structures that encourage efficiency and distributed solar power.

The law will help improve reliability of the grid, reduce the need for additional power plants (which are typically, in California; natural gas) and reduce greenhouse gas emissions.

This new CPUC rate structure is also likely to even further boost solar power in the state, adding jobs now, and saving ever-increasing amounts of money over time. It is not often that government succeeds in setting good policy that benefits citizens with both clean air and long term prosperity, but this is an example of it.

Image: Flikr user Rafaella

Source: CPUC

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