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Rate Increase Disguised in Cuddly Sheep’s Garb

What's behind PG&E's Time Of Use Pricing camouflage?

Ted Loewenberg
Ted Loewenberg

Elizabeth Warren premised her presidential run on the idea that Americans struggle to get ahead in a system that is rigged against them. The outcomes are predicable: You are more likely not to succeed if you are in the lower 50% of the nation’s economy. Unfortunately, the San Francisco Public Utility Commission, a “service” of city government providing water, sewer and power to residents and businesses, is also gaming electricity rates against the people. How so?

You probably received a letter from PG&E informing you that in July, the rate you will pay for electricity used from 4 to 9 pm every day will increase, under a plan called “Time Of Use” (TOU) Pricing. PG&E justifies this by claiming that the electric grid is most stressed during these hours. By raising the cost of electric service, it will make you aware that you are paying more, and thus you will defer using as much as possible to non-peak hours. That’s not only good for the grid, but also for the environment, says the utility giant. All those fossil fuel emitting greenhouse gases will be reduced. Because, allegedly, renewable energy is less available as the sun goes down. (Save that thought for later.) Theoretically, from 4 to 9, you’ll maximize this social good by sitting in your dark, cold home, without TV, the internet, radio, stereo, and going hungry until 9:00:01. Then you can crank up your electric stove, furnace, incandescent lights, washing machine, dishwasher at 9:01 to resume your life. Finally, about 1 am, you’ll drop into bed exhausted, after consuming cheaper “fossil fuel generated” electricity taking care of the housework.

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The promise of TOU metering is that the customer can adjust their usage to use electric devices when the cost is lower, during the day. That’s not really possible. For those working households, the consumers are paid to perform their jobs, and not wash their linens at home.”

The SFPUC and PG&E executives behind the controls know you won’t be a 5 hour hermit. Rather, you’ll continue your life as you used to and burn the same amount of electricity. Only, now it will cost more. You may save a nickel or a dime by using the “Delay Start” function on your dishwasher, but don’t expect to be able by year’s end to pick up a few Apple shares with your savings.

The promise of TOU metering is that the customer can adjust their usage to use electric devices when the cost is lower, during the day. That’s not really possible. For those working households, the consumers are paid to perform their jobs, and not wash their linens at home. Retirees have some flexibility to shift their habits. Families have almost no chance for altering the rhythms of their lives and their children’s habits. In short, the SFPUC must do the work to devise a reasonable schedule for its customers to discourage electrical consumption.

The brief, and slight benefit of signing up for the TOU billing is that the first year your bill will be guaranteed to cost less than your current annual billing. In the event it is not, next year PG&E will rebate the overage! Who knows what to expect for the following years? However, look at who benefits from you paying more than you expected: PG&E. At this time next year, the company will have borrowed free money from the ratepayers. Million$ of dollar$. Just when this monopoly enterprise suffers from owing billion$ of buck$ for setting the state on fire, this change gifts them with free ca$h. Your ca$h.

SFPUC's Dilemma

Not only does the SFPUC have to declare a better TOU schedule for its customers, but it must also hold hearings on the change in rates. No mention of this scheme was made when Clean Power SF set their rates initially, in 2017. It knew that this was coming, as the California PUC mandated the concept on all of the state’s electrical providers in 2015. Without hearings at the SFPUC Commission, imposition of this price increase seems to set a precedent that customers have no say in the rate setting process. Furthermore, to the best of my knowledge, this was never discussed at the SFPUC’s Citizens Advisory Committee, of which I was a member. Presentations were made about the rationale behind the pricing of power, along with the goal of being less expensive than PG&E’s price which also includes “profit.”

Other than that, the Time Of Use electric metering in San Francisco is problematic. First, PG&E rates only applies to its customers, and not the customers of Clean Power SF. The company only performs meter reading and billing functions for the SFPUC, while maintaining the grid infrastructure. It has very few customers left in the City. Most of us are electric customers of SFPUC, and use either a mix of renewable and fossil fuel sources, or 100% renewable sources. That is, the Community Choice Aggregators (CCAs)  … such as San Francisco’s Clean Power SF … are responsible for developing their own TOU schemes. The City apparently has decided to simply parrot PG&E. That’s your public servants commitment to your best interests. The advantage of being part of a CCA has essentially vanished!

The problem here lies in the fact that PG&E wants you to be flexible in power consumption by minimizing your electric use precisely when you need it most. This past winter, the population of Texas learned what “flexible pricing” really means. Even though they were told it will never happen that demand would be so great that the supply of energy could be drained, Texans got whacked by sky-high power bills for desperately needed power when the temperature dropped to freezing lows. All it took was the perfect storm. When will San Francisco get hit by the perfect storm or earthquake? Dirty Harry asked, “Do you feel lucky today?”

An Alternative Approach

A more effective reduction on the grid would be had by charging more during normal business hours, when all those offices and businesses are running their HVAC systems, their computers, their elevators, their lights and their equipment like machines, refrigerators, and other heavy duty systems. In addition, the SFPUC needs to invest in storage technology as well as to encourage the use of wind generation, a constant in San Francisco. Our SFPUC public servants must combine the residents’ needs with an effective reduction of electrical demand, in a way that doesn’t inflict financial damage on residents. Especially when lower income households of will suffer the most from the increased cost of power just when the family needs it the most.   

Do residents want more efficient use of electricity at the lowest rate possible? Sure! Do residents want environmentally sound practices along with innovative storage devices to generate, deliver and save electricity? Sure! Do residents want the SFPUC to be transparent in addition to working in the best interests of their customers? Without fail! What’s your response, Ms. Barbara Hale, Director of the Clean Power SF Enterprise?

Ted Loewenberg is a San Francisco resident.

April-May 2021


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