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May 10, 2001
505 Van Ness Ave, Room 5303
San Francisco, CA 94102
Thank you for inviting my opinion on 00-11-056, Rate Design. I regret that my schedule doesn't permit me to attend in person.
While I have no basic complaint with the CPUC's approach of charging more the more electricity is used, I do have some concern that it is out of step with the fundamental problem of peak and off-peak usage.
For example, looking at PG&E's schedules E-1 Residential, E-7 TOU, and E-8 Seasonal we observe the following (based on rates schedules posted on the PG&E website as of 5/8/01):
|Summer Baseline (Peak)|
|Winter Baseline (Peak)|
Notice that peak use is 400 percent the cost of off-peak use in the summer months. This tells me that there is some market derived pricing model that says that peak summer power is worth 4 times as much as off-peak. In the CPUC proposal, the maximum increase for marginal usage is 200 percent. Therefore, someone using lots of power off-peak, when electricity is plentiful, will pay up to a 200 percent penalty, while the person consuming small amounts of very valuable peak power may pay no or a lesser penalty even though the market values it much more highly.
Also, is there a loophole? I didn't find any baseline rates for E-7. Could someone jump to E-7 to avoid these charges?
If the real problem at this moment is peak power, then this approach seems to broad-brush. However, I realize that in the short term installing TOU meters in homes is not feasible. Still, I would prefer to see a plan that addresses peak and off-peak usage in this way:
1. All large consumers (to be defined) must be on TOU
2. Any customer who continues to use lots of power over baseline must move to TOU. (In actuality this could be a huge benefit to them. If they are using off-peak power then their bill would go down substantially)
3. There be no surcharges on TOU rates (the rates themselves, especially for peak usage might have to go up).
4. Residential customers without AC should be encouraged to move to lower rate schedules such as TOU or E-7, placing more of the burden on those who use AC, especially those using it at peak times of day.
I thank you for your attention.
cc: D. Feinstein, B. Boxer, A. Eschoo, G. Davis, SJ Mercury News