The CPUC has reduced certain rates for customers of Pacific Gas and Electric Company (PG&E) to provide for lower utility bills for households with large summer-cooling demands.
Residential electric and natural gas customers receive an energy allowance for basic energy needs at a lower rate (called Baseline). The rate is designed to promote conservation such that the greater the usage, the higher the rate. Once a consumer uses more than their baseline amount their bill gets increasingly higher as they use more energy. The adjustment approved by the CPUC in May provides rate relief this summer for households with substantial upper tier consumption who are experiencing great hardship during hot summer months due to the steeply tiered rate structure that was in place.
The CPUC reduced PG&E Tier 4 rates by approximately 2.5 cents/kWh; reduced Tier 5 rates by approximately 10 cents/kWh; and increased Tier 3 rates by approximately one-half cent/kWh, effective June 1, 2010. Tier 1 and 2 rates are unchanged.
As an example of the new rate structure, using the March 1, 2010 rates for PG&E, the new rates are as follows:
- Under the current 5 Tier structure, Tiers 1 and 2 would see no change at all.
- Tier 3, currently has a rate of 28 cents per kWh and under the decision, it would go up to 29 cents kWh. However, by allowing this modest increase in the Tier 3 rate, PG&E can reduce Tiers 4 and 5.
- Tier 4 is 42 cents per kWh and it would decrease to 40 cents per kWh.
- Tier 5 is 49 cents per kWh and would decrease to 40 cents per kWh.
Nearly one-half of PG&E’s residential customers are on the low income program CARE rates, or have usage in Tiers 1 and 2 only, and with the Assembly Bill 1X rate freeze for those customers, there was not a rate increase from 2001 through 2009. In addition, all customers were on the 5-Tier system, so even the large users also had rate protection for their Tiers 1 and 2 usage. Therefore, PG&E had to collect all residential rate increases through its Tiers 3, 4, and 5 rates.
The CPUC determined that changing the rates helps to bring PG&E’s rates within the range of the other regulated utilities and spreads the burden for revenue collection to the large Tier 3 base so it is more evenly distributed.
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The Structure Group, an industry leader in consulting services and business solutions for the energy and utilities industries, has started the field meter testing portion of its independent evaluation of Pacific Gas and Electric Company’s (PG&E) electric Smart Meters as part of the CPUC’s evaluation.
In April 2009, Structure was selected by the CPUC to conduct the evaluation in response to accuracy complaints received by the CPUC. Structure will focus on key areas including meter accuracy, end-to-end system performance, customer high bill complaints, and Smart Meter deployment practices used by PG&E.
Structure will collect and examine extensive data to determine whether PG&E’s Smart Meter system is measuring, collecting, and billing electric usage accurately, both now and since Smart Meter deployment began.
Structure’s independent evaluation will include verifying PG&E’s installation practices by selecting a sampling of meter installations. As part of this process, Structure will pull meters directly from the stock from the manufacturer to test in a lab environment, observe the Smart Meter installation process, and retest the Smart Meter on-site. Structure will also test the electromechanical meter that is being removed to determine if it is outside an established tolerance level.
Additional testing utilizing shadow meters, sometimes referred to as side-by-side meters, will involve the installation of a second lab-calibrated meter that will be installed at select customer locations. These meters will be used to establish the accuracy of the customer meters already installed by performing a weekly check of accuracy and to monitor billing of these accounts through at least one bill cycle. The results of the weekly check will be posted on a public forum.
Structure will also perform accuracy tests of a random selection of already installed Smart Meters. This testing will include the removal of the installed Smart Meter, placing the Smart Meter on on-site meter testing equipment, and running a series of tests on these meters prior to having the meter reinstalled. Structure will supplement the accuracy testing of the Smart Meters with a review of how past data recorded by the meter was received and processed by PG&E’s back-end systems, including whether the systems properly handled exception conditions, such as communication issues, that sometimes occur in a typical Smart Meter system.
Structure will perform lab tests on a number of meters to determine how the meters react to various environmental conditions and how the PG&E system recognizes and treats abnormal data when introduced in the lab testing environment. Structure will compare the results from field and lab testing along with the review of PG&E’s documentation on past and current operational and deployment policies, processes, and procedures against a framework of industry best practices. Structure will conduct analyses of the high bill customer complaints to determine the underlying nature of the complaint as well as looking at usage patterns prior to the installation of the Smart Meters.
The outcome of the independent evaluation will be provided to the CPUC by Structure in a report later this summer.
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