Today SEIA filed testimony in Pacific Gas & Electric’s (PG&E) current rate case. This is an opening salvo in a proceeding likely to stretch into 2018. SEIA’s case builds on our efforts to get time-of-use (TOU) periods right, protect the investments of existing solar customers and create new rate options.

Should the Commission agree with SEIA, PG&E will end up with more manageable, and appropriate, on-peak periods than those proposed by the utility. Customers will also have new rate options to help take advantage of abundant renewable energy and stand up the nascent residential solar-plus-storage business.

Like its fellow investor-owned utilities, PG&E is proposing a dramatic change to TOU periods for commercial rates. Currently PG&E’s on-peak periods are midday, from 12PM to 6PM. In its application, PG&E is proposing shifting this on-peak period a full five hours to 5 to 10PM, which would mean that customers’ highest rates would move from the middle of the day into the evening. The utility is also proposing that commercial customers have super off-peak periods, and thus very low rates, in the middle of spring days.

The risk that PG&E’s proposal will be approved is already having a dramatic effect on new commercial solar sales. This impact has accelerated since the recent TOU decision didn’t extend grandfathering to customers whose projects filed interconnection applications after January. Companies are already reporting customers putting projects on hold and business falling by half.

Luckily, the recent TOU decision did get a number of things right, which should mean that PG&E’s severe proposal doesn’t come to fruition. The first is that TOU periods should be based on the costliest times for all components of electricity service: generation, transmission, and distribution. Including all of these costs yield a 3 to 8PM on-peak rather than a 5 to 10PM. The TOU proceeding decision also created 10 years of grandfathering of TOU periods for commercial, industrial and agricultural net metering customers. These were two critical recommendations SEIA made and which the Commission adopted, based on SEIA’s analysis.

In addition to getting TOU periods right using SEIA’s methodology, the PG&E application should also adopt innovative new rate designs that help Californians better take advantage of renewable energy.

Rather than creating super off-peak periods that run every day in the spring, SEIA is recommending the Commission adopt the Discount Days proposal it introduced in the TOU proceeding. Discount Days would offer customers a discounted price in the midday periods of a limited number of spring days, called a day in advance, when prices are expected to be low, renewable supplies will be abundant and there is the possibility of renewable energy curtailment.

Finally, SEIA has proposed new solar-plus-storage rates, in part as an alternative to PG&E's proposed optional demand charge rates for residential and small commercial customers. Residential demand charges are exceedingly difficult for residential customers to manage and are effectively just a fixed charge. These practical challenges aside, PG&E’s proposal would not create a sufficient financial incentive to invest in solar. As an alternative, SEIA is proposing TOU rates with a large differential between on and off-peak periods so that customers can charge their batteries when the sun is shining and use it when rates are expensive in the late afternoon and early evening.

Many months stand between now and when the Northern California solar market will have certainty about the future of TOU rates. However, with SEIA’s TOU methodology in place, 2018 should begin with workable rates and new solar-plus-storage options.