By Craig W. Anderson
PG&E’s changes to time-of-use (TOU) periods for electric rates and new customers will face new rate schedules. The plans will change and how farmers use energy will cause new rate impacts to become effective.
The new TOU era began March 1 and, said Karen Norene Mills, CFBF director of legal services, “Most PG&E customers will be transitioned to new rate schedules as part of the change in time-of-use periods on a mandatory basis.”
According to Mills, PG&E agricultural customers have received notices about the impending transition “for a few months.”
PG&E customers who didn’t sign up for a program before March 1 will be assigned an ag category beginning March 1 based on their use history. If the customer becomes dissatisfied with PG&E’s choice, they will have one chance during the next year to change it.
“We’ll finally see what will happen under this new system,” said Dave Simpson, SJFB board member.
Simpson explained, “Like many PG&E customers, I struggled with their information because it’s always so convoluted. I needed to talk to a human being so I called the utility’s website and after 90 minutes on hold over a series of calls, I got through to a fellow who pointed me to the tariff schedule on their website, where the information was.”
The anonymous representative told Simpson he could select a category. “He said I could ‘try it for a few months and if you don’t like it, you can always change.’”
“I think it was easier going to the moon than going through PG&E’s process,” Simpson said. “But at least you can pick your poison.”
Another fight for ag
“The TOU changes means agriculture will be fighting yet another mandatory program that will levy additional costs on ag,” said SJFB Executive Director Bruce Blodgett. “Farmers, ranchers and processors will do what they must to make it through this change.”
PG&E said the changes are needed to accommodate renewable energy resources on the grid where the peak demand times for energy use has shifted from afternoons to evenings.
The change is this: new agricultural peak hours will be 5 to 8 p.m., every day, replacing the original peak hours of noon to 6 p.m. in the summer; the summer season has been shortened to June through September and gradual reductions to summer peak period demand charges will apply.
New challenges
“This is not a pretty situation,” said SJFB Second Vice President Jake Samuel. “It’s bad due to irrigation needs because, say, row crops must go 24/7 and that means increased irrigation expenses.”
He said he knows of no farmers or processors who were contacted by PG&E to acquire their thoughts on the TOU changes, nor did the PUC advance any inquiries about what was on the way regarding the new TOU.
“Farmers will manage to work through these challenges,” Samuel said. “It’s more management to worry about and it will be hard to deal with a 5 p.m. to 8 p.m. peak time every day, year round.”
However, Simpson pointed out that hearings were held at various venues and times and a Stockton meeting was well represented by SJFB.
Changes will come
Moving to the new schedules shouldn’t increase rates in most cases, but, said Mills, “PG&E has so many other proceedings that cause upward pressure on rates that it’s difficult to separate the impacts from the change in rate schedule and the increase from other rate elements.”
Simpson commented that the utility’s customers “still have to pay a myriad of charges that are tacked onto their bills.”
Blodgett said, “There are some short-term adjustments farmers can take but eventually the new TOU regs will absorb those as well.”
Grandfathered rates
An example of this is customers who installed net metering accounts before July 2017 made them eligible for 10 years of grandfathered rates on existing TOU periods from the date of interconnection, according to PG&E. What matters here is that the underlying rates are subject to adjustments for cost changes.
New costs, old costs
Because applying new costs to existing TOU periods flattens the difference between on-and off-peak rates, they will be adjusted gradually over a three-year period to incorporate the new costs.
“When rates are ‘modified’ it’s usually bad news for farmers,” said SJFB First Vice President Ken Vogel. “Whatever it will be, it will present challenges regarding the costs of doing business.”
PUC fails farmers
Mills explained, “The thinking of the California Public Utilities Commission is that the new, on-peak periods and pricing will incentivize customers to change their usage, despite presentations that operational adjustments to the new periods are extremely difficult for agricultural customers.”
In short, the PUC fails to consider the potentially negative ripple effect the new rate rules will have on agriculture.
Sources say that since 2014 the utility’s rates have increased 40%.
Inputs threatened
About the irrigation schedules resulting from the TOU change, Simpson said succinctly: “It’s a joke. Nobody irrigates this way. And when your category gets filled up with other users, you can’t get water in that category.”
“Everything looks good on paper,” said SJFB President David Strecker. “We don’t use [energy] inputs except when we need them so with this change we don’t want to lose, say, irrigation for some reason. PG&E will affect different people and what they’re growing and processing with this change.”
Mills noted that customers can change to a different schedule after the initial transition but if a change takes place the customer must stay on the new schedule for a year.
Minimum mitigation
PG&E did provide some mitigation relief for bundled customers most affected by the new rate schedules with new TOU periods. For example, customer who would experience increases exceeding 7% and $100 per year due to the new rate transition schedules may choose to remain on existing TOU rates with the old TOU periods without being required to take service under the new TOU rates until March 2022. After that date there is no escaping the new TOU rates and periods.
Inevitability
“It was inevitable this would happen and, well, times change and we have to adapt to the changes,” Samuel said.
The following rate schedule revisions were adopted to incorporate the new TOU periods:
- Current AG-R and AG-V rate schedules will be replaced by a new AG-F rate schedule, which provides similar pumping flexibility and long off-peak pumping periods. PG&E said customers will be assigned to their selected option unless local system constraints preclude the selection.
- Current AG-1A/4A/5A customers transition to either AG-A1 or AG-A2, depending on levels of operating hours.
- Current AG-1B/4B/5B customers transition to AG-B.
- Current AG-1C/4C/5C customers transition to AG-C.
The California Farm Bureau contributed to this story
