Time-of-use rate proposal affects farms and ranches


Issue Date: July 12, 2017
By Christine Souza

In a significant change that could cause challenges for agricultural customers, Pacific Gas and Electric Co. proposes to revise time-of-use periods for its electric rates. A California Farm Bureau Federation utilities specialist encourages farmers to provide testimony during upcoming public hearings or to submit written comments on how the rate changes would affect farms and ranches.

PG&E proposed the changes as part of a general rate case application filed last year with the California Public Utilities Commission, which regulates privately owned utilities. Three hearings on the proposal will be held in late July and mid-August.

Time-of-use, or TOU, rates encourage customers to save energy at certain times of day by charging more for electricity during peak demand periods. Karen Norene Mills, CFBF associate counsel and director of public utilities, said the highest-cost peak periods have generally been from noon to 6 p.m. on weekdays. Electricity has been sold at lower rates at other times, with rates the lowest during weekends and holidays.

But now, with the onset of large solar facilities that generate considerable amounts of electricity during the afternoon, utilities have proposed shifting TOU periods.

Under the PG&E proposal, the peak use period would be pushed back, beginning at 5 p.m. and lasting until 10 p.m. every day, both summer and winter. "Partial peak" rates would be charged between 3 p.m. and 5 p.m. and again between 10 p.m. and midnight every day during the summer. All remaining hours would be considered off-peak.

The utility's summer rates would be charged from June through September; currently, the rates run from May through October.

PG&E has proposed customers be placed on schedules with the new TOU periods by 2019.

Mills said agricultural customers who have successfully adopted current time-of-use periods might find it difficult to transition to the proposed periods. In expert analysis submitted to the PUC earlier this year, CFBF recommended several changes to the rate proposal:

  • Any new TOU periods should be implemented on an optional, not mandatory, basis until the new TOU periods can be re-evaluated, with full consideration of available data impacting the periods.
  • PG&E should offer customers several TOU period definition options to reflect the uncertainty inherent in current and future market conditions. Reasonable options include the current TOU periods, flat rates and any new TOU period adopted in the rate case.
  • Customers not now on time-of-use rates should not be transitioned to TOU rates until the new periods are established. In addition, an assessment should be made of those customers' usage and of any others who opt in to the new TOU periods before any mandatory implementation by the remaining agricultural customers.
  • Under any transition scenario, the rate schedule offered to agricultural customers should allow longer off-peak periods during two consecutive weekdays or even a weekend, recognizing the realities of efficient irrigation systems.

Mills emphasized that agricultural customers "should have a 48-hour period with lower-priced power to manage irrigation operations. Such a rate structure would also provide PG&E with more certainty about when usage occurs, to better manage the local grid."

Fresno County Farm Bureau CEO Ryan Jacobsen described challenges PG&E agricultural customers would likely face with the proposed TOU periods and the accompanying prices. In written testimony, Jacobsen noted that drip irrigation systems are designed to release water during an extended period of time.

"Farmers using drip irrigation cannot fully automate their irrigation systems," he said, "thus, they are sensitive to the time of the peak TOU period."

Pushing the peak-pricing period into the 5-10 p.m. window, Jacobsen said, would pose a number of challenges for farmers. For example, daylight hours are necessary to inspect drip equipment such as emitters; farmers need a longer duration for irrigation applications; and there is a lack of employees available to work at the start of the proposed partial-peak period starting at 10 p.m.

"The hours from early morning to the 5 p.m. proposed start of the peak period do not provide enough irrigation hours for many crops and conditions," Jacobsen said. "Irrigation duration is extremely important; water cannot be turned off and on every few hours. In many instances, subsequent days in a row are needed to adequately penetrate water into the root zone."

In providing comments to the PUC about the rate proposal, Mills said, farmers and ranchers should provide similar details about why any change in TOU periods would disrupt their operations.

At the public-participation hearings, Mills said, an administrative law judge handling the rate case will oversee the proceedings and include customers' comments in the public record.

"Public participation hearings provide a unique opportunity for PG&E customers to communicate with the commission," she said.

PG&E has scheduled the hearings throughout its service territory:

  • July 27 in Oakland at the Elihu M. Harris Oakland State Building, Room 1, 1515 Clay St., at 2 p.m. and 7 p.m.
  • Aug. 14 in Bakersfield at the Bakersfield City Council Chambers, 1501 Truxtun Ave., at 2 p.m. and 6 p.m.
  • Aug. 15 in Stockton at the Stockton State Building auditorium, 31 E. Channel St., at 2 p.m. and 6 p.m.

To review information about what to expect at public hearings, go to the commission website at www.cpuc.ca.gov/General.aspx?id=4519.

Written comments may be submitted via email to public.advisor@cpuc.ca.gov/ or regular mail to CPUC Public Advisor's Office, 505 Van Ness Ave., San Francisco, CA 94102. Comments should reference PG&E's 2017 general rate case II (A.16-06-013).

(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.