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Southern California Edison’s new rate plan: A dim future for environmentally-aware homeowners

This article was submitted to the Claremont Courier but not published.

Southern California’s main electric utility, Southern California Edison (SCE), recently proposed a rate structure that will have negative environmental consequences for the next few years. Under the proposed changes, the 94-cent flat monthly charge that all of Edison’s customers currently pay would jump to $10 by 2017. Additionally, the company plans to transition its rate structure from the current four tiers to only two by 2018. These changes would make customers’ bills less dependent on how much energy they use, reducing costs for customers who use more energy and increasing costs for those who use less.

The proposed rates reflect those suggested by the California Public Utilities Commission (CPUC) in order to facilitate a transition to Time of Use (TOU) rates — rates based on when energy is used rather than simply how much — by 2018. TOU pricing as an end-game is fully in line with the CPUC’s environmental principles, as it encourages Load-Leveling, or flattening of demand on the grid. Load-Leveling both allows the grid to operate more efficiently and encourages solar installations, whose greatest power output coincides with peak energy demand.

However, the CPUC also suggested that these transitional rates be introduced alongside opt-in TOU rates. SCE’s proposed rate plan makes no provision for TOU rates while shifting consumption charges from large energy consumers to low energy consumers. Thus, these changes in absence of offering opt-in TOU rates could be harmful in the short term.

For one, the proposal will increase rates for homeowners who use solar panels or conserve energy in other ways such as simply reducing their air conditioning use. Russ Worden, Edison’s director of external relations, recently told the Daily Breeze that under the proposed changes, “customers would begin to pay a flat rate up front, and the part of their electricity rate that is determined by consumption would be less and less of the monthly bill.” In other words, environmentally-conscious customers would pay large fees up front despite their efforts to save energy.

Secondly, SCE’s proposed new rate structure disincentivizes short-term investment in solar energy. The SCE rationale is that this change would be fairer to homes without solar installations by forcing solar users (many of whom currently have negligible bills) to pay for their access to the grid. However, this charge overlooks the role solar users already play in Load-Leveling, the end-goal of TOU rates: when demand on the electrical grid peaks in the afternoon, solar panels happen to produce the most energy, easing the load on the grid.

Edison recognizes the importance of leveling load demand. The reason is that an out-of-balance demand profile means the Utility must spend Billions of dollars (with a “B”) to build additional generating capacity, as well as transmission lines. Conversely, a smoother demand profile saves the utility Billions. If Edison decreases the dependence of rates on consumption, it would cut the incentive for solar users to provide this important Load-Leveling service.

Therefore, while TOU pricing is an end-goal fully in line with CPUC’s environmental principles, attempting to achieve it by accepting SCE’s proposed rates could have negative consequences. The proposal will remove incentives for solar use and energy conservation, at least in the short term. These changes occur at a crucial time when the concentration of atmospheric carbon dioxide is already high enough to cause irreversible warming, so these short-term effects could have long-term impacts. This negative consequence could be avoided by simply introducing opt-in TOU rates along with the new pricing scheme.

This September, the CPUC will hold a public hearing to discuss this proposal, and they will decide next spring whether or not to approve it. Anyone interested in voicing an opinion can attend the hearing or write to the CPUC or to Southern California Edison.

For more information about the hearing dates and times, or to be kept informed of any changes, as well as to be informed of the process for addressing the CPUC, please go to the following website:

Demystifying Sustainability is an initiative of Sustainable Claremont (

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