On November 10, 2011, the California Public Utilities Commission (“CPUC”) issued a decision regarding Pacific Gas and Electric Company’s (“PG&E”) petition for modification of decision 10-02-032, regarding implementation of dynamic pricing rates for residential and small/medium agricultural and commercial customers.  The CPUC denied requests by the California Small Business Association and Division of Ratepayer Advocates (“DRA”) to protect certain customers.  The CPUC’s decision closed the proceeding.

On March 2, 2010, the Commission issued a decision in the PG&E 2009 Rate Design Window proceeding.   That decision moved toward making dynamic pricing available for all electric customers by adopting default and optional critical peak pricing (“CPP”) and time-of-use rates (PG&E refers to CPP rates, and time-of-use (“TOU”) rates together as Peak-Day Pricing (“PDP”) rates) beginning May 1, 2010 for certain customers of PG&E.

In its January 14, 2011 petition for modification, PG&E requested changes to the dynamic pricing implementation schedule.  On November 10, 2011, the CPUC granted changes for small and medium commercial and industrial (“C and I”) customers and small and medium agricultural customers:

• Small and medium C and I customers first default to mandatory TOU beginning on November 1, 2012, and then default to PDP (including TOU) no earlier than March 1, 2014, and the deadline for default to PDP begins on November 1, 2014. 
• For Small and medium agricultural customers the CPUC affirmed PG&E’s proposed 13-month extension, until March 1, 2013, to begin to default these customers to mandatory TOU.   The CPUC also granted PG&E’s request that all agricultural customers (including large customers) not eligible for the initial default date shall be defaulted once each year, on March 1, rather than on a rolling basis.

The DRA and the California Small Business Association asked: (1) the CPUC to protect C and I customers defaulting from flat rates to TOU rates for one year; (2) PG&E offer TOU to Small C&I Customers on a mandatory basis only when certain conditions have been met; (3) allow customers meeting certain narrow criteria to opt out to flat rates; and (4) continue to offer PDP to its Small C&I Customers on a voluntary (“opt-in”) basis only.  These requests stem from a May 2011 whitepaper put out by the DRA titled “Time-Variant Pricing for California’s Small Electric Consumers,” where the report concluded in part “on the whole, TOU rates offer comparable, if not superior, benefits to those obtainable from CPP.”  The DRA also expressed concern over the complexities of critical peak pricing.

 A copy of the CPUC’s order is available here.