Energy Exchange

California’s disadvantaged communities could benefit from time-of-use electricity prices, but it won’t happen automatically.

By Lauren Navarro, senior policy manager, and Jamie Fine, senior economist

It’s no secret that California is a clean energy leader. The state is on track to meet its renewable energy goals, with many utilities hitting targets ahead of schedule. In order to transition to a system that can handle increased levels of clean energy like solar and wind, we need innovative solutions to take advantage of these resources. One low-cost solution is to change how we pay for electricity – making it cheaper when it is powered by clean resources and more expensive when powered by fossil fuels with time-of-use pricing. Utilities are on their way to bringing this to Californians, piloting the new rates in advance of a full rollout in 2019 and building on the successful rollout of these rates to commercial customers a few years ago.

For many Californians, the shift to time-of-use pricing will be new, but not impact their bills very much and could even save them money, particularly for people who live along the coast. However, for some customers – communities with lower incomes in hotter areas of the state that are more vulnerable to possible summertime bill increases – shifting when they use electricity can be harder, and without help their costs could increase. Rightly, lawmakers and regulators have pushed for extra attention for these vulnerable customers as the state moves toward time-of-use rates. While utilities acknowledge this discrepancy as an issue, none are offering sufficient, robust solutions (you can learn more about this in our recent blog).

A new bill introduced last week by California Assemblymember Joaquin Arambula would add that utilities must consider how time-of-use rates could impact low-income customers in disadvantaged communities before putting them on the new rates. It is vital to protect the most economically and environmentally vulnerable Californians from financial hardships. And the answer is not easy. All Californians stand to benefit from rates that could lower pollution and integrate more renewables – yet, we don’t want to heedlessly roll-out the rates in a way that results in higher electricity bills for customers with low incomes. Read More »

Posted in California, Clean Energy, Demand Response, Electricity Pricing, Energy Efficiency, Energy Equity, General, Time of Use / Comments are closed

Utilities planning to move Californians to time-of-use pricing need solutions for low-income customers

By Andy Bilich, clean energy analyst, and Jamie Fine, senior economist

Last month, all three of California’s major investor-owned utilities submitted applications to the California Public Utilities Commission detailing their respective strategies for how to transition residential customers to time-of-use pricing. Time-of-use pricing, if done right, is a low-cost strategy to help meet California’s climate and clean energy goals. This innovative tool can help the state rely more on clean energy and less on fossil fuels, at the same time delaying the need for new infrastructure and reducing costs and harmful emissions. While a significant number of Californians will be able to adapt to this new pricing, the shift this summer and next will likely be more challenging for some ─ namely, low-income customers in hot areas of the state.

Environmental Defense Fund (EDF) supports time-of-use pricing for its benefits to the environment, the electric system, and customer’s pockets. However, the utility plans have some troubling gaps that may prevent the new system working for everyone. For California to pioneer a clean economy for all, the utilities and the commission must proactively overcome barriers facing vulnerable customers who need more help adjusting to time-of-use rates. Read More »

Posted in California, Electricity Pricing, Time of Use / Read 2 Responses

Like Clockwork: California Utilities Should Embrace Clean Energy Solutions when Testing Time-of-Use Electricity Rates

electricity-1330214_1920California’s three major utilities – Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) – have proposed plans to move Californians to electricity prices that vary with the time of day. Time-of-use pricing, or TOU, is critical to aligning our energy use with times when clean, cheap electricity powered by sunshine and wind is already available. TOU works because electricity is cheap when it can be powered by renewable resources and more expensive during times of peak (high) energy demand. As with any shopping, knowing prices empowers people to choose wisely to save money.

New research from Lawrence Berkeley National Lab estimates TOU rates could collectively save customers up to $700 million annually by 2025 by getting the most out of our solar and wind resources. They find that absent TOU rates, we will waste up to 12 percent of existing renewable generation capacity, and solutions like TOU can reduce this waste by six-fold. We at Environmental Defense Fund (EDF) estimate that if this clean electricity were instead provided by natural gas power plants, it would generate 8 million additional tons of greenhouse gas pollution each year. Burning gas when we could instead rely on clean energy would dramatically impede the 11 million tons per year of greenhouse gases we need to eliminate from our economy to reach California’s 2050 environmental goals.

Testing TOU

The three big utilities are half-way through “opt-in” pilot programs that test these new rates. They’ve just submitted plans to the California Public Utilities Commission to test automatically switching some people to TOU in 2018, leading up to a complete roll out in 2019. TOU rates will work for most customers right away, reducing their bills and providing new opportunities to save money. Further, people can always opt out of the program.  Read More »

Posted in California, Clean Energy, Demand Response, Time of Use / Read 2 Responses

Moms Know What’s Best: How Time-of-Use Electricity Pricing can Benefit California Families

mcaf listenedCalifornia’s “big three” utilities, at the behest of state regulators, are in the process of examining and improving how they price electricity, including something called time-of-use (TOU) electricity pricing. This option – which rewards people who shift some of their electricity use to times of day when clean energy is abundant and electricity is cheaper – can help California families create safer communities while saving money on their utility bills. Mom’s Clean Air Force California mom Linda Hutchins-Knowles agrees, and recently wrote this opinion piece in the San Jose Mercury News encouraging others to adopt TOU.

Linda, like many moms, wears multiple hats. As a mother, she wants to help leave her children a safer, more sustainable word. As an advocate, she supports increasing our use of clean energy over dirty fossil fuels to help clean our air and environment as a whole. Finally, as a consumer, she wants to do these things without breaking the bank. Read More »

Posted in Clean Energy, Electricity Pricing / Read 1 Response

3 Ways to Improve California’s Time-Of-Use Electricity Pilots

Jay Godwin photo - 07/31/2015 Location: The Mueller community in Austin, Texas. Caption: Mueller resident Dennis Nick is a Pecan Street program participant. He has solar collectors on his roof and an electric car in his garage. Information about his energy use can be accessed through mobile apps and on the web.California’s big three utilities – San Diego Gas & Electric (SDG&E), Pacific Gas & Electric (PG&E), and Southern California Edison (SCE) – serve approximately 80 percent of the state's residential customers, which is why their recent move to update the state’s antiquated electricity pricing could be a game-changer for helping the state achieve its climate and clean energy goals.

In late December, while most people were on holiday, the utilities submitted plans to the California Public Utilities Commission (CPUC) to assess electricity prices that vary with the season and time of day. These plans detail the next two years of piloting time-of-use (TOU) pricing for most residential customers, and will help California reduce pollution and increase renewable energy production. Read More »

Posted in California, Clean Energy, Electricity Pricing, Energy Financing, Grid Modernization / Comments are closed

Four Things California Should Consider before Rolling Out Time-of-Use Pricing


This summer the California Public Utilities Commission (CPUC) ordered big changes in how Californians will pay for electricity. Starting in 2019, residential customers of the big three investor-owned utilities (Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric) will be switching residential customers to the same pricing plan used by commercial and industrial customers:  time-of-use (TOU) electricity pricing. This approach rewards people who shift some of their electricity use to times of the day when renewable energy is plentiful and electricity is cheaper. Before rolling this out to all 33 million Californians, however, the CPUC has instructed the utilities to perform experiments on how best to design and then market TOU pricing to customers. Read More »

Posted in California, Time of Use / Read 2 Responses