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SoCal Edison’s new rates will vary with the time of day. Some customers may not benefit much — or at
By SAMMY ROTHSTAFF WRITER
But critics say time-varying rates could hurt more homes than they help — and a new study finds people tend to overestimate the benefits.
State officials have ordered Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric to enroll most customers in so-called time-of-use rate plans. Under time-varying rates, electricity will cost more in the evening and over the summer, and less during the afternoon and in the winter.
SDG&E plans to begin shifting residential customers to time-of-use rates in March, with Edison and PG&E following in October 2020. Business and agricultural customers already pay time-varying rates.
The idea is to better align rates with the costs of producing electricity, with a goal of reducing overall energy costs and cutting planet-warming emissions. The new rates are being designed so the investor-owned utilities take in roughly the same amount of money overall as they do under current rates.
But a study published last month by Ohio State University researchers sheds new light on the potential shortfalls of time-varying rates, three years after the California Public Utilities Commission ordered the three big utilities to prepare to make the switch. (Los Angeles Department of Water and Power customers aren’t affected.)
The researchers found that Edison customers enrolled in a 2016 pilot program largely based their opinion of the new time-of-use rates on how much money they thought they were saving. The problem: They weren’t very good at estimating how much they were saving.
“I would be concerned about people going into the program thinking, ‘This is a good thing for me,’ and then being surprised later when it turned out that’s not the case,” said Nicole Sintov, a professor of behavior, decision-making and sustainability at Ohio State and one of the study’s coauthors. When actual savings fall short, customers might be more likely to drop out of the program or stop shifting the times they use electricity, Sintov said.
The utilities and several major environmental groups see time-of-use rates as a valuable tool to help clean up the state’s power supply. California has a growing abundance of cheap solar power during the middle of the day, so much that utilities sometimes have been forced to pay other states to take it. But the sun goes down every evening just as people get home from work, forcing utilities to fire up expensive, polluting gas plants.