Powering Strong Communities

Calif. Energy Commission Updates Load Management With Call for Time Sensitive Rates

In a ruling that affects the state's investor-owned utilities, as well as some of its largest public power utilities, the California Energy Commission (CEC) recently updated the state’s load management standards, including measures calling for rates that reflect costs and emissions in a more timely fashion.

Under the updated standards, which take effect April 1, 2023, Pacific Gas and Electric, Southern California Edison, San Diego Gas & Electric, Sacramento Municipal Utility District (SMUD), Los Angeles Water and Power (LADWP), and large community choice aggregators will be required to:

  • Develop retail electricity rates that change at least hourly to reflect grid costs and greenhouse gas emissions and are approved by their governing board.
  • Maintain up-to-date rates in a database called the Market Informed Demand Automation Server (MIDAS), which will provide a central repository for all rate information.
  • Educate customers about time-dependent rates and automation technologies to encourage their use.

The updates will save consumers money by shifting usage to times of cheaper or abundant electricity, the CEC said, adding that a better-balanced grid slows the rise of electricity costs, strengthens the grid, reduces the need for more fossil fuel plants, and avoids electricity transmission and distribution congestion.

The updates also will help customers take better advantage of utilities’ lower time-dependent rates so smart appliancdes can be used and buildings can automatically respond to more frequent rate changes that reflect electricity grid conditions, the CEC said. That change will save consumers money by shifting usage to times of cheaper or abundant electricity, the CEC said.

The CEC expects the changes have the capacity to produce $243 million in net benefits over 15 years and could reduce annual peak hour electricity use by 120 gigawatt hours.

The CEC, as the state’s primary energy policy and planning agency, has statutory authority to adopt standards to help shift energy use.

Since 1978, the CEC encouraged load management through utility air conditioner cycling programs that automatically reduce use at commercial or industrial sites.

And, over time as technology has advanced, more appliances such as thermostats, pool pumps and residential water heaters have been automated to reduce use or shift time of use from high-demand hours, in response to signals from utilities and energy aggregators.