Saturday, December 4, 2021

Your electricity bill changes. Here’s what you need to know

More than 2 million Edison Southern California residents are about to upgrade.

About half of that number will cut their monthly bills, the utility says. About a million people can see their accounts grow by several dollars.

For the record:

11:24 am September 24, 2021An earlier version of this column incorrectly stated that Edison customers cannot revert to their previous plan after the first year. They can make changes once a year.

And Edison’s roughly 100,000 customers can see their electricity bills rise hundreds of dollars a year if they don’t give up or change their behavior significantly.

Californians are currently facing one of the most radical changes in the way they pay for energy. Ensuring that taxpayers are well aware of rates – and the decisions they must make – is critical. Edison could have done better.

The representative of the utility company contested this characterization. We will come back to this.

I learned of the change in Edison’s rate from a Palm Springs resident named Lynn Pettit, who sent me a copy of a letter she received from the utility with information about the transition, which in her case will take effect in December.

“Is this a scam?” she asked.

“At first I thought the letter seemed reasonable,” Pettit, 85, told me. “Then I read the rest and thought,“Which?‘”

Okay, the next snippet is a little wobbly, so hold on.

It’s no news to anyone that California’s power grid is struggling to keep up with demand as climate change impacts electricity consumption, especially during an increasingly hot summer.

The insanely high temperature means millions of air conditioners are running at the same time. Blackouts are an ongoing opportunity.

To remedy this, the California Public Utilities Commission ordered Edison, Pacific Gas & Electric and San Diego Gas & Electric to switch most customers to so-called time-of-use plans.

The idea is to offer people lower rates during off-peak hours. Typically, demand is highest between 4:00 pm and 9:00 pm, when there is less solar energy, and on summer weekdays, energy can cost about 60% more.

Time-of-use plans save most taxpayers money if they concentrate their energy consumption — say, on the washing machine — outside of that time frame.

Edison has already migrated nearly a million private customers and most business customers to time-limited plans. It now notifies an additional 2.3 million private customers that it is their turn, with tariff changes occurring in waves from November to April next year.

Let’s make a reservation here that time-of-use plans are a good idea. They encourage consumers to reduce the load on the energy system, to use alternative energy sources more widely, and in general to treat Mother Nature better.

But if the letter Pettit received is any indication, Edison could do a better job of selling the concept.

“Time-to-use plans encourage people to use energy at a time of day when renewable energy sources such as solar and wind are the most common and at the lowest cost,” it said.

“By making small changes to your energy habits, you can save money and help our state achieve clean energy goals.”

Then comes the first curve of the ball. The letter says that Pettit and other Edison customers will automatically switch to limited-time plans unless they opt out.

Let’s be clear on this: Not participating is almost always a red flag for consumers. They usually signal that something is good for the company but bad for the customers.

For example, sharing your personal information. If you do not want the company to do this, you must opt ​​out (and even then the companies will do so on a limited basis).

Companies are well aware that relatively few consumers will try to give up, so important decisions are usually presented as giving up rather than agreeing. Call it corporate coercion.

Plus, though, many, if not most, consumers will disagree with what they haven’t initiated. They will ignore the offer.

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This is a catch-22 of modern life. Refusing to participate is often unfair. Subscriptions are often ineffective.

Edison’s letter to Pettit makes it clear that changing her data plan is not practical. No in her favor. It says that under her current plan, she pays about $ 4,467 a year in electricity bills.

According to the unfinished time-of-use plan, she would pay $ 4,705 a year – a rate increase of more than 5%.

The letter says that for the first 12 months after the transition, she will receive a one-time loan from Edison if her bills for the time of use exceed her current payments. It states that she can return to her current plan within the first year. After this time, changes are also possible once a year.

“I wonder how many people won’t read the letter or check their accounts regularly,” Pettit told me. “The only sane way to do this is to ask people to agree.”

I usually agree with that. But in this case, the rates are extremely high and it is very important that as many Californians as possible participate in the new tariff plan.

Ron Gales, a spokesman for Edison, said the Southern California utility and PG&E in Northern California initially supported the subscription idea when plans for a time-to-use tariff began to take shape across the state about a decade ago.

California regulators, however, saw that the Sacramento utility was more fortunate to opt out, so a decree was issued: No Participation for All.

From Edison’s point of view, it was the right move.

Gales told me that when the utility tested the subscription with some customers, only about 5% agreed to upgrade to the new plan. This is 95% of those who either did not want to change, or did not even think about it.

“We are trying to change the behavior of millions of people,” said Gales. “How do you do this if no one agrees?”

The San Diego utility completed the conversion of eligible residential customers to time-of-use rates in May 2020. According to the PUC, 98% of the total remained in the new plan.

Gales said most Edison customers will see lower bills as a result of the switch to time-of-use plans and modest changes in energy consumption.

But he admitted that for roughly 100,000 “highly disadvantaged,” like Pettit, average monthly bills could rise as much as 10% from current levels.

“We admit it,” he told me. “We will contact such people by phone.”

I pointed out that amid the increase in fraudulent calls, many people are no longer picking up the phone. “That’s a valid argument,” Gales admitted, “another quirk of modern life.

I think Edison missed the chance to take the case to tens of thousands of people, like Pettit, who would look at their emails and conclude that they were speeding up a lot.

Gales explained that the estimates of recurring payments versus payments per use time do not take into account the behavioral changes that the buyer can make.

That is, Pettit and the others could still see their accounts fall. if they regulate energy consumption to avoid peak hours.

Edison could have better talked about this.

He had to provide not two, but three data points – checking current accounts, checking accounts for time of use, and checking accounts for time of use, taking into account the new behavior.

Gales said Edison’s executives decided to estimate for people like Pettit how much their bills would drop if they adjusted to conditions of duration of use. “We just didn’t have much confidence in our numbers,” he admitted.

I said earlier that it was shaky. Now you understand why.

The bottom line for all Californians is that switching to time-of-use norms is a good thing and should help us better manage our energy resources, especially on hot summer days.

Edison could have explained it better. it should explained it better.

But now you know.

Nation World News Desk
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