Ron Nichols, Southern California Edison president, Rosemead
In his March 5 guest commentary, Brett Bouchy delivers several mischaracterizations about Southern California Edison’s time-of-use rates. In truth, SCE’s time-of-use rates incentivize customers to use power when it is cleanest and available at the best prices, and conserve energy when it is less clean and more expensive.
Mr. Bouchy’s claim that the new on-peak time-of-use period is driven by “pursuit of short-term profit” is false, since California’s investor-owned utilities, Southern California Edison, Pacific Gas & Electric and San Diego Gas & Electric do not profit from purchasing energy on behalf of customers. It is passed through with no mark-up.
SCE designed its time-of-use rates to more closely align with the actual cost of delivering electric service. California now enjoys an abundance of cleaner, less expensive renewable energy during the hours of 8 a.m. to 4 p.m. – so plentiful that the California Independent System Operator too often must pay other states, also known as negative pricing, to import California’s excess energy from renewable sources at those times. SCE’s time-of-use rates reward customers who tap into that abundance by passing along the lower midday cost of electric service, thus encouraging greater use of renewable energy here in California.
The new 4–9 p.m. on-peak time-of-use hours reflect the time of day when delivering energy is costliest. This is due to sustained high customer demand combined with decreasing renewable production, requiring the ramp-up of traditional power plants.
SCE is committed to solar energy. SCE has successfully worked with solar representatives such as the Solar Energy Industry Association and the California Solar and Storage Association on mutually agreeable rates to meet California’s environmental objectives. Renewables like solar energy play a crucial role in de-carbonizing the electric sector, one of our company’s key long-term objectives. SCE has connected more than 300,000 residential solar customers to the grid, and the numbers have kept growing under the state-mandated time-of-use rate structure adopted by the California Public Utilities Commission.