Peak Off-Peak Ratio (Pk/SOP) % Discount (SOP)* Tier 1 18.1 cents 12.6 cents 6.1 cents Tier 2 28.7 cents 23.2 cents 16.7 1.72 17% Hypothetical untiered rate** 25 cents 18 cents 10 cents 2.5 50% *relative to an estimated 20 cent average non-CARE residential rate **This hypothetical rate is intended to illustrate the type of rate that could provide adequate incentive to increase consumption in super-off-peak periods. While SCE’s Tier 1 rates seem attractive, a majority of customers consume more than baseline quantities in some months, and therefore pay Tier 2 rates during those months. We find that SCE’s Tier 2 spring weekday super-off-peak rates (16.7 cents per kWh) are too high to provide adequate incentive to increase consumption in super-off-peak periods. Furthermore, offering a 50% discount relative to the average residential rate as illustrated in Table 1 would be unlikely to violate the rate floor consisting of the sum of nonbypassable costs (NBCs) and marginal costs. By this Resolution, we therefore order SCE to file a supplemental advice letter proposing an optional TOU rate that is revenue neutral to its Rate 3 proposal, has the same TOU periods and seasons as the proposed Rate 3, but does not contain a baseline credit. For non-CARE customers, the untiered Rate 3 proposal must have a super-off-peak rate that is at least 50% below the seasonal average residential rate. For CARE customers, the untiered Rate 3 proposal must have a super-off-peak rate that is at least 50% below the seasonal average CARE residential rate. Both non-CARE and CARE versions of the untiered Rate 3 must have a ratio of seasonal peak to super-off-peak rate of at least 2.5. While this approach would distinguish SCE’s Rate 3 from the other IOUs’ TOU pilot rates and the control group, we believe that there is sufficient comparability to obtain reliable and useful results about the differential load and billing impacts across each service territory with and without a baseline credit. Essentially, the comparison of SCE’s Rate 3 group to the control group would test
two variables – TOU and baseline credits – as opposed to the single variable of TOU. When compared to PG&E’s proposed Rate 3, which maintains a baseline credit, the SCE pilot of an untiered Rate 3 may provide important information about the baseline credit and its interaction with TOU pricing. Sampling Strategy SCE’s proposed recruitment targets for each rate (excluding the additional recruitment for their technology treatment) are reproduced below. This proposal includes oversampling (beyond their percentage representation in the general population) of CARE/FERA customers on all three rates, seniors (where a senior is the head of the household) in the hot climate region for Rate 2 and households with incomes less than or equal to (≤) 100% of the Federal Poverty Guidelines in the hot climate region for Rate 2. This oversampling is necessary to make the findings related to “senior citizens” and “economically vulnerable” customers required by P.U. Code § 745(c)(2). We agree with SCE and the TOU Working Group that the proposed sampling strategy supports analysis of the data upon completion of the pilots that accommodates all proposed definitions of “senior citizens” and “economically vulnerable” customers, and is therefore sufficient for the Commission to make its findings under P.U. Code § 745(c)(2). For example, the consultant report clarifies that “there are more households in the population on the latter definition [households with at least one senior] than there are based on the former definition [a senior is the head of the household].” Thus, there will be sufficient pilot participants to conduct the required analysis for the “senior citizens” group under either definition. The definitions of “senior citizens” and “economically vulnerable,” amongst others, were the subject of briefs filed by parties to R.12-06-013 on December 23, 2015 and January 11, 2016. In those briefs, the IOUs request that the Commission use this Resolution to resolve the legal brief, rather than issue a separate Decision. However, this Resolution is solely intended to determine whether the