2011 Ex Ante Load Impacts for PG&E’s Non-residential TOU Rates

The main objective of this study is to develop projections of the incremental load impacts from Pacific Gas and Electric’s (PG&E) implementation of mandatory time of use (TOU) rates for small and medium non-residential customers. Over the next few years, PG&E will transition nearly 500,000 commercial, industrial and agricultural customers from flat pricing structures to time-varying pricing.

While the ex ante impacts factor in the prior empirical evidence on TOU price response, there is substantial uncertainty concerning the magnitude of those impacts. The uncertainty stems mainly from the fact that there is little precedent for mandatory placement of small and medium non-residential customers on TOU rates similar to those that are scheduled to be implemented by PG&E. Mandatory TOU rates for small customers have been tested in pilots (mostly in the 1980s), but have not been implemented on a utility-wide scale. The remainder of the executive summary highlights the relevant empirical evidence of small and medium non-residential price response, and presents ex ante forecasts that incorporate future customer transitions to mandatory TOU rates.

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