PACIFIC GAS AND ELECTRIC COMPANY 2020 GENERAL RATE … · 6 Schedule E-ELEC. Customers with qualifying technologies may, if they so 7 choose, opt to take service on Schedule E-ELEC,

Application: 19-11-019 (U 39 M) Exhibit No.: (PG&E-5) Date: July 16, 2020 Witness(es): Dennis M. Keane Erika Wasmund

PACIFIC GAS AND ELECTRIC COMPANY

2020 GENERAL RATE CASE PHASE II

EXHIBIT (PG&E-5)

SCHEDULE E-ELEC – UN-TIERED RESIDENTIAL TOU RATE WITH FIXED CHARGE

JULY 2020 ERRATA

(PG&E-5)

-i-

PACIFIC GAS AND ELECTRIC COMPANY 2020 GENERAL RATE CASE PHASE II

EXHIBIT (PG&E-5) SCHEDULE E-ELEC – UN-TIERED RESIDENTIAL TOU RATE WITH FIXED CHARGE

ERRATA TESTIMONY

TABLE OF CONTENTS

Chapter Title Witness

1 SCHEDULE E-ELEC RATE DESIGN Dennis M. Keane Attachment A ILLUSTRATIVE SCHEDULE E-ELEC RATE

DESIGN Dennis M. Keane

2 MARKETING, EDUCATION AND OUTREACH Erika Wasmund

(PG&E-5)

PACIFIC GAS AND ELECTRIC COMPANY

CHAPTER 1

SCHEDULE E-ELEC RATE DESIGN

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PACIFIC GAS AND ELECTRIC COMPANY CHAPTER 1

SCHEDULE E-ELEC RATE DESIGN

TABLE OF CONTENTS

A. Introduction ............................................................................................................ 1-1

B. Rate Design Objectives ........................................................................................ 1-2

C. Customer Considerations ..................................................................................... 1-3

D. Schedule E-ELEC Rate Design............................................................................ 1-5

E. Basis for the $25 Fixed Charge .......................................................................... 1-10

F. Rules for Changing Schedule E-ELEC Rates Between GRC Proceedings..... 1-10

G. Customer Eligibility/Tariff Administration/Billing Issues .................................... 1-11

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PACIFIC GAS AND ELECTRIC COMPANY 1

CHAPTER 1 2

SCHEDULE E-ELEC RATE DESIGN 3

A. Introduction 4

Pacific Gas and Electric Company (PG&E) presents in this testimony a new 5

residential time-of-use (TOU) rate option, Schedule E-ELEC,1 designed to 6

encourage electrification, as required by Decision (D.) 20-03-003 issued in 7

March 2020 in Phase 3 of the investor-owned utilities’ (IOU) consolidated 2018 8

Rate Design Window (RDW) proceedings.2 Ordering Paragraph (OP) 11 of 9

D.20-03-003 directed PG&E to propose, in this 2020 General Rate Case (GRC) 10

Phase II proceeding, a new opt-in, un-tiered, residential TOU rate with a fixed 11

charge. The fixed charge component results in commensurately lower 12

volumetric charges, which is the primary reason this new rate encourages 13

electrification.3 D.20-03-003 also provided that this new optional pro-14

electrification rate be made available solely to customers using any of the 15

following technologies: 16

• electric vehicles (EVs); 17

• energy storage; or 18

• electric heat pumps for water heating or climate control (space heating 19

and/or cooling). 20

Customers with EV charging, energy storage, or electric heat pumps at their 21

residences are referred to in this testimony as owning “qualifying technologies” 22

that make them eligible for this new E-ELEC rate. 23

1 “E-ELEC” is the interim name for this un-tiered TOU rate with a fixed charge. PG&E

intends to rename this schedule upon completion of customer research around meaningful rate plan names.

2 The three IOUs’ respective 2018 RDW Applications (17-12-011, 17-12-012, and 17-12-013) were subsequently consolidated.

3 See D.20-03-003, p. 52. OP 11 originally required PG&E to submit this proposal no later than May 1, 2020, which was the then-existing due date for PG&E to serve its Update Testimony in this proceeding (to reflect the 2020 sales forecast, more recent marginal costs, and May 1, 2020 present rates). On April 27, the Administrative Law Judge granted an extension of the Update Testimony deadline to May 15, 2020. On April 30 the CPUC’s Executive Director similarly extended OP 11’s deadline to May 15, so that all of PG&E’s GRC Phase 2 testimony could be bound together and served at the same time.

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OP 11 directed PG&E to hold a public workshop, no later than April 1, 2020, 1

to obtain “the assistance and input from interested parties to encourage 2

electrification.” PG&E held that publicly noticed workshop on April 1, 20204 and 3

received valuable input from a wide range of stakeholders. 4

This chapter presents PG&E’s proposed new pro-electrification rate, 5

Schedule E-ELEC. Customers with qualifying technologies may, if they so 6

choose, opt to take service on Schedule E-ELEC, where the rate will also apply 7

to all other non-qualifying loads served through the same meter. Attachment A 8

to this chapter contains PG&E’s proposed total and unbundled rates for new 9

Schedule E-ELEC. 10

B. Rate Design Objectives 11

The primary benefit of offering an un-tiered TOU rate with a fixed charge is 12

that it supports the policy goal of encouraging electrification5 by using the 13

revenues received from the fixed charge component to reduce volumetric energy 14

charges in all TOU periods. Thus, customers whose electric usage tends to be 15

relatively high due to adoption of technologies like EVs, on-site energy storage, 16

or heat pumps, can achieve lower bills on this rate than they would have under 17

PG&E’s currently existing residential TOU rates. Lower energy charges can 18

make the purchase of such beneficial qualifying technologies more economically 19

attractive, and over time will result in reduced overall greenhouse gas emissions 20

as more customers switch to cleaner electricity from natural gas, gasoline, or 21

diesel fuels. 22

In the absence of a fixed charge, PG&E’s current residential electric rates 23

over-charge customers for incremental usage, with energy rates far in excess of 24

marginal costs. These artificially high volumetric rates discourage customers 25

from purchasing qualifying electrification technologies because the additional 26

kilowatt-hour (kWh) consumption of those technologies would be charged rates 27

4 Since COVID-19 shelter-in-place orders were in effect on April 1, 2020, this workshop

was held virtually, over WebEx. More than 20 people remotely attended this workshop. 5 Because customers who use these qualifying electric technologies have shifted or will

shift away from previous technologies that rely more heavily on fossil fuels, such electrif ication supports the State’s greenhouse gas reduction policies and the California Public Utilities Commission’s (CPUC or Commission) Energy Action Plan.

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in excess of marginal costs, causing such customers’ electric bills to 1

rapidly escalate. 2

The fixed charge revenue under the E-ELEC rate permits lower volumetric 3

rates that are closer to marginal cost levels and result in a more accurate price 4

signal. Because the additional charges under E-ELEC for the incremental kWh 5

consumption from the qualifying technologies are more closely aligned with 6

PG&E’s cost increases, such customers’ total bills would be lower than they 7

would have been under PG&E’s currently available rate schedules. 8

The absence of tiers in the E-ELEC rate also contributes to a more accurate 9

price signal, since PG&E’s costs do not increase with cumulative monthly usage, 10

either overall or within a TOU period. 11

Finally, the TOU rate structure allows more accurate price signals for 12

customers, so long as they are set to appropriately reflect actual cost differences 13

between TOU periods (for example, between the cost of consuming in the peak 14

versus the off-peak period). It is important that price differentials between TOU 15

periods (for example, the peak vs. off-peak price (POPP) differential) not be set 16

at artificially high levels above what is cost-justified, as this does not send an 17

accurate price signal and leads to over-incentivizing load shifting. When this 18

occurs, the revenue lost per kWh shifted exceeds the cost avoided, 19

necessitating future rate increases to make up the shortfall, thus forcing 20

non-participating ratepayers to subsidize the participants on the rate. 21

C. Customer Considerations 22

The three qualifying technologies for PG&E’s newly proposed Schedule 23

E-ELEC are (1) EV charging; (2) energy storage (primarily batteries); and 24

(3) electric heat pumps used for (a) water heating and/or (b) space conditioning 25

(i.e., heating or cooling). 26

In designing the Schedule E-ELEC rate, it is important to recognize that 27

each of these different technologies may result in different usage patterns, as 28

outlined below. Thus, different potential rate design elements – particularly the 29

magnitude of the POPP differentials – affect each such technology differently: 30

1) EV charging: In theory, EV loads can be flexible, especially if automatic 31

charging is set up for lower-priced TOU periods. In practice, however, some 32

customers’ EV charging flexibility may be limited (e.g., if they commute in 33

their EVs and thus are unable to charge at home during work hours). 34

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2) Battery storage: Charging/discharging patterns, on the other hand, are likely 1

to be more flexible than EVs, with such customers likely to be better able to 2

automate the hours they charge and discharge to take advantage of TOU 3

price differences. 4

3) Heat pump technologies’ usage patterns depend on the activity to which the 5

heat pump is being put: 6

(a) Water heating heat pump loads that are also accompanied by a 7

sufficiently sized water tank may be quite capable of being scheduled to 8

take advantage of low-priced TOU periods and avoid high-priced ones. 9

However, if the customer’s tank size is more limited, this flexibility 10

declines and the customer may need to operate the water heat pump 11

more frequently during high-priced TOU periods. 12

(b) Space conditioning heat pumps have limited flexibility, with hours of 13

operation driven largely by the times of day household members are at 14

home, unless the residence is extremely well-insulated. 15

Because the E-ELEC rate will apply to the entirety of the house’s electric 16

usage, another important factor affecting the customer’s overall bill on this rate is 17

the assortment of other technologies or appliances in the residence (beyond the 18

qualifying technology). For example, while a large POPP differential would 19

result in a lower off-peak rate that permits a household to inexpensively charge 20

its EV, the associated higher peak rate would increase the portion of that 21

household’s bill associated with other end-use loads (e.g., air conditioning, 22

lighting and entertainment) that occur during peak hours. 23

PG&E already offers an exclusive un-tiered TOU rate option (Schedule EV2, 24

with very large POPP differentials) that provides one type of electrification 25

incentive, for customers with EVs or battery storage. Therefore, to provide a 26

distinctive new rate for a greater range of customer choice, PG&E proposes that 27

Schedule E-ELEC have smaller POPP differentials, more in line with its other, 28

non-EV/storage, TOU rates. This approach takes into account the fact that heat 29

pumping technologies appear to have more limited flexibility in usage patterns 30

than EVs and storage. In addition, this testimony also proposes to modify 31

Schedule EV2’s applicability language to permit customers with heat pumps to 32

qualify for the that rate, as well. 33

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Therefore, adoption of the E-ELEC rate and expansion of EV-2’s 1

applicability will provide residential customers with any of the three qualifying 2

technologies a choice of either EV2, with its very large POPP differentials, or 3

new Schedule E-ELEC, with its fixed charge and more moderate POPP 4

differentials and lower peak prices.6 Thus, E-ELEC and EV-2 will provide 5

customers with qualifying technologies two very distinct incentivizing rate 6

choices, making it more likely they will find a rate that produces lower annual 7

bills, and consequently encourages electrification. 8

D. Schedule E-ELEC Rate Design 9

The TOU period definitions for PG&E’s proposed Schedule E-ELEC are 10

identical to those for Schedule EV2 and are shown in Table 1-1 below. The 11

Schedule EV2 TOU period definitions were adopted relatively recently, in 12

Phase II of PG&E’s 2017 GRC,7 and thus fairly accurately reflect PG&E’s 13

changed cost patterns resulting from the “duck curve” phenomenon of changing 14

loads net of solar and wind generation. These TOU period definitions also 15

reflect a settlement between PG&E and other parties, and thus reflect customer 16

preferences, as well. Finally, the peak period of 4 p.m. - 9 p.m. aligns with the 17

peak period of PG&E’s Schedule E-TOU-C, which will be heavily promoted 18

during the upcoming default TOU transition period, as well as most non-19

residential TOU rates also being implemented with extensive customer 20

communications. 21

As shown in the table, proposed Schedule E-ELEC has three TOU 22

periods—peak, partial-peak, and off-peak—in both summer and winter seasons, 23

and the hours for each TOU period are the same every day of the year. 24

6 Of course, qualifying customers could also choose any of the other optional TOU rates

generally available to PG&E’s residential customers, including the TOU rate, Schedule E-TOU-C, which will become PG&E’s standard rate starting October 2020. Such customers could also choose PG&E’s E-1 tiered non-TOU rate.

7 D.18-08-013.

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TABLE 1-1 SCHEDULE E-ELEC TOU PERIOD DEFINITIONS

The design of Schedule E-ELEC proceeded in four steps. First, PG&E 1

began by developing, for both generation and distribution, the unit marginal 2

costs (in cents per kWh) corresponding to the E-ELEC TOU periods shown 3

in Table 5-1: 4

• Summer peak; 5

• Summer partial-peak; 6

• Summer off-peak; 7

• Winter peak; 8

• Winter partial-peak; and 9

• Winter off-peak. 10

PG&E then calculated its cent per kWh marginal cost differential targets, 11

between peak and off-peak and between partial-peak and off-peak, as shown in 12

Table 1-2 below. 13

Current Months WeekdaysWeekends/

Holidays

Summer Peak June - September 4 p.m. - 9 p.m. 4 p.m. - 9 p.m.

Summer Partial-Peak June - September3 p.m. - 4 p.m.,

9 p.m. - Midnight

3 p.m. - 4 p.m.,

9 p.m. - Midnight

Summer Off-Peak June - September Midnight - 3 p.m. Midnight - 3 p.m.

Winter Peak October - May 4 p.m. - 9 p.m. 4 p.m. - 9 p.m.

Winter Partial-Peak October - May3 p.m. - 4 p.m.,

9 p.m. - Midnight

3 p.m. - 4 p.m.,

9 p.m. - Midnight

Winter Off-Peak October - May Midnight - 3 p.m. Midnight - 3 p.m.

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TABLE 1-2 FULL MARGINAL COST DIFFERENTIALS CORRESPONDING TO

SCHEDULE E-ELEC TOU PERIODS ($/KWH)

Second, PG&E set the TOU rate differentials to better reflect marginal costs, 1

while still leaving E-ELEC’s POPP differentials milder (21.9 cents per kWh in 2

summer and 3.6 cents per kWh in winter) than the quite steep POPP 3

differentials already available under Schedule EV2 (31.3 cents per kWh in 4

summer and 18.5 cents per kWh in winter). Specifically, both the generation 5

and distribution rate differentials were set at 75 percent of their full marginal cost 6

target differential levels. 7

Third, a fixed charge of $25 per month was added to the E-ELEC design.8 8

The additional revenue yielded by this fixed charge was used to reduce all of the 9

TOU energy rates by an equal cent per kWh subtractor. In this way, the overall 10

rate levels were reduced in all TOU periods by the same amount, without 11

altering the TOU rate differentials. 12

Finally, in response to a concern aired at the workshop by the Public 13

Advocates Office, PG&E has ensured that the addition of the fixed charge to the 14

design did not lower any of the volumetric rates (either generation or distribution) 15

to below its unit marginal cost value in any TOU period. This ensures that the 16

revenue received from every kWh consumed by residential households 17

contributes positive contribution to margin (CTM). Absent this constraint on the 18

E-ELEC rate design, a negative CTM amount might occur in a given TOU 19

period. If so, this would cause the revenue received from the consumption of a 20

kWh in that period not to cover the marginal costs of producing and delivering it, 21

requiring the resulting shortfall to have to be borne by non-participants. 22

8 The basis for this fixed charge level is described in the following section.

Generation Distribution Total Generation Distribution Total

Summer Peak vs. Off-Peak $0.144 $0.074 $0.219 $0.192 $0.099 $0.291

Summer Part-Peak vs. Off-Peak $0.045 $0.012 $0.057 $0.060 $0.015 $0.076

Winter Peak vs. Off-Peak $0.033 $0.003 $0.036 $0.044 $0.004 $0.048

Winter Part-Peak vs. Off-Peak $0.013 $0.001 $0.014 $0.018 $0.001 $0.018

Schedule E-ELECProposed Rate Differentials Full Marginal Cost Target Differentials

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Table 1-3 presents the E-ELEC rates resulting from these rate design steps, 1

along with the EV2 rates for comparison purposes. Figure 1-1 presents this 2

same comparison in bar chart format. As the table and figure show, the 3

reduction in TOU volumetric rates made possible by the fixed charge revenue 4

results in E-ELEC off-peak rates of comparable magnitude to EV2, and peak 5

and off-peak rates that are significantly lower – thus providing a strong incentive 6

for electrification for customers for whom high peak and part-peak charges might 7

otherwise be a deterrent. By providing customers with qualifying technologies 8

with these two distinct rates, it increases the likelihood that at least one of them 9

will be sufficiently attractive to incent the purchase of the qualifying technologies. 10

TABLE 1-3 COMPARISON OF SCHEDULE EV2 AND E-ELEC RATES

Rate Component E-ELEC EV2

Fixed Charge ($/mo) $25.000 NA

Energy Charges ($/kWh)

Summer Peak $0.423 $0.511

Summer Part-Peak $0.262 $0.400

Summer Off-Peak $0.205 $0.198

Winter Peak $0.212 $0.342

Winter Part-Peak $0.190 $0.326

Winter Off-Peak $0.176 $0.157

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FIGURE 1-1 COMPARISON OF SCHEDULE E-ELEC AND EV2 TOU ENERGY CHARGES

($/KWH)

Schedule E-ELEC does not have a minimum bill amount, only the $25 fixed 1

charge. Customers on either of PG&E’s low-income programs – California 2

Alternate Rates for Energy (CARE) or Family Electric Rate Assistance (FERA) – 3

would be eligible to take service on Schedule E-ELEC, so long as the household 4

had a qualifying technology. The bills for such customers would be calculated 5

using the (non-CARE) rates on Schedule E-ELEC, but then a line-item discount 6

(either 35 percent, for CARE, or 18 percent, for FERA) would be applied to the 7

amount of the bill as calculated for a non-CARE customer in order to obtain the 8

final monthly bill amount.9 9

9 Similar to the existing EV2 rate, the E-ELEC rate would not be available to PG&E’s

Medical Baseline (MBL) customers, since the MBL program is only compatible with tiered rate structures (where additional baseline amounts can be provided).

$0.000

$0.100

$0.200

$0.300

$0.400

$0.500

$0.600

Summer Peak Summer Part-Peak Summer Off-Peak Winter Peak Winter Part-Peak Winter Off-Peak

E-ELEC EV2

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E. Basis for the $25 Fixed Charge 1

PG&E carefully considered what level of fixed charge to include in its 2

E-ELEC rate proposal and selected a $25 fixed charge in order to maximize the 3

incentive this rate will provide to customers who adopt qualifying technologies, 4

by significantly reducing the volumetric charge by about 5.5 cents per kWh.10 5

PG&E notes that this level of fixed charge is consistent with the general 6

magnitude of Sacramento Municipal Utility District’s (SMUD) mandatory $21.05 7

residential fixed charge (called the System Infrastructure Charge), which applies 8

to all of SMUD’s residential rates. 9

PG&E’s choice of a $25 fixed charge, like other rate components (e.g., the 10

CARE surcharge or the Public Purpose Program charge), can be and is justified 11

based solely on policy considerations (i.e., supporting the policy goal of 12

electrification through these technologies) which are unlikely to be achieved 13

without significant reductions to volumetric charges. As such, the $25 fixed 14

charge was selected without reference to cost of service considerations. 15

However, once selected, PG&E took care to ensure that, even with this level of 16

fixed charge, all volumetric charges would still cover marginal costs. PG&E 17

would note that, in D.17-09-035 (in the fixed charge phase of PG&E’s 2017 GRC 18

Phase II proceeding), the CPUC’s limitation of the categories of costs that can 19

be recovered in a fixed charge, only applied to proposals for a mandatory fixed 20

charge that would be included in all residential rates. Here, no customer is be 21

being forced to pay E-ELEC’s $25 fixed charge, as this is a voluntary rate.11 22

F. Rules for Changing Schedule E-ELEC Rates Between GRC Proceedings 23

After this and other TOU rates are set in this proceeding, PG&E proposes 24

that all subsequent changes to this and all other rates on residential TOU 25

schedules, between this 2020 GRC Phase II and PG&E’s 2023 GRC Phase II, 26

10 With PG&E’s proposal to use the incremental f ixed charge revenue to reduce all

volumetric rates by an equal cents per kWh subtractor, each $5 increment to the monthly fixed charge results in about a 1.1 cent per kWh reduction to all volumetric TOU energy charges. Thus, although PG&E performed analyses on E-ELEC with fixed charge amounts lower than $25, PG&E concluded that these variants did not sufficiently support the Commission’s pro-electrification goal.

11 PG&E’s $25 fixed charge proposal is being made in the current context of a voluntary rate option to promote the state’s electrification policy goal and would not be considered precedential for any future potential Commission consideration of mandatory fixed charges on other residential rates.

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be calculated on an equal cents per kWh basis. Doing so will maintain the TOU 1

rate differentials based on the marginal cost differentials adopted in this 2

proceeding.12 PG&E proposes that the $25 fixed charge not change prior to a 3

final decision in PG&E’s next GRC Phase II proceeding. 4

G. Customer Eligibility/Tariff Administration/Billing Issues 5

For enrollment onto the E-ELEC rate, PG&E proposes to mirror the existing 6

processes for rate enrollment on the EV2-A rate. Customers with EV charging 7

loads are able to enroll onto the EV2-A rate by either calling PG&E or by making 8

the request on-line and providing their charging level and unique vehicle 9

identification number. Customers with a storage technology can enroll onto the 10

EV2-A rate after completing the PG&E interconnection process, which provides 11

information on the battery capacity. In the case of electric heat pumps for water 12

heating or climate control, PG&E proposes to adopt a similar model as the 13

process for EV by requesting some unique form of identification. 14

For tariff administration, PG&E will maintain its current practice of requiring 15

customers to enroll themselves both when starting service at a residence that 16

was previously enrolled in the rate or when transferring service to another 17

residence after having become eligible. This ensures that all eligibility 18

requirements are met. In like manner, customers will be required to notify PG&E 19

in the event their qualifying applicable technology is removed. Furthermore, 20

PG&E will reserve the right to perform an audit if there is evidence that the 21

customer no longer meets the requirements. 22

To address billing and implementation concerns, PG&E proposes that 23

customers seeking enrollment on the E-ELEC rate must have a SmartMeterTM 24

that is successfully transmitting data. Since this new rate requires structural 25

changes to PG&E’s billing system, PG&E anticipates that it would take at least 26

twelve months after a final decision is issued in this proceeding before it could 27

be programmed, tested, and implemented. PG&E would begin and complete 28

the programming of this new rate as soon as practicable, given the large number 29

of rate changes already scheduled and expected to be in progress at the time a 30

decision is issued. 31

12 This is consistent with the rules for rate changes between GRCs approved by the

Commission in D.18-08-083 for PG&E’s 2017 GRC Phase II.

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If the customer has qualified solely through EV ownership, since this is not 1

permanently installed at their premises, if the customer were to later sell its EV 2

and not replace it with another EV, it would be the customer’s responsibility to 3

inform PG&E of this change and move to a different rate. 4

(PG&E-5)

PACIFIC GAS AND ELECTRIC COMPANY

CHAPTER 1

ATTACHMENT A

PRESENT AND PROPOSED RATES

PACIFIC GAS AND ELECTRIC COMPANY

2020 GRC PHASE II

EXHIBIT 5, CHAPTER 1, ATTACHMENT A

PRESENT AND PROPOSED RATES

E-ELEC (Electrification Rate)Distr Gen PPP CIA Other Total Distr Gen PPP CIA Other Total

SUMMER ENERGY CHARGE (/kWh) Peak .11376 .24428 .01338 .00000 .05195 .42338 Part-Peak .05100 .14517 .01338 .00000 .05195 .26150 Off-Peak .03942 .10007 .01338 .00000 .05195 .20482WINTER ENERGY CHARGE (/kWh) Part-Peak .02809 .11855 .01338 .00000 .05195 .21198 Part-Peak .02598 .09858 .01338 .00000 .05195 .18989 Off-Peak .02546 .08523 .01338 .00000 .05195 .17603FIXED CHARGE(/meter/day) .82136 .82136 25.00

PRESENT RATES (May 1, 2020) PROPOSED RATES

(PG&E-5)

1-AtchA-1

(PG&E-5)

PACIFIC GAS AND ELECTRIC COMPANY

CHAPTER 2

MARKETING, EDUCATION AND OUTREACH

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PACIFIC GAS AND ELECTRIC COMPANY CHAPTER 2

MARKETING, EDUCATION AND OUTREACH

TABLE OF CONTENTS

A. Introduction ....................................................................................................... 2-1

B. Rate Plan Awareness, Education, and Adoption .............................................. 2-2

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PACIFIC GAS AND ELECTRIC COMPANY 1

CHAPTER 2 2

MARKETING, EDUCATION AND OUTREACH 3

A. Introduction 4

As discussed in Chapter 1, Decision (D.) 20-03-003, issued in March 2020 5

in Phase 3 of the investor-owned utilities’ 2018 Rate Design Window (RDW) 6

proceedings,1 directed Pacific Gas and Electric Company (PG&E) to propose, in 7

this 2020 General Rate Case Phase II proceeding, a new rate option to 8

encourage electrification. Specifically, Ordering Paragraph 11 of that decision 9

directed PG&E to propose a new opt-in, un-tiered, residential time-of-use (TOU) 10

rate with a fixed charge, including a plan for customer outreach and education to 11

encourage potentially eligible customers to take advantage of the rate.2 12

Chapter 1 describes PG&E’s proposed rate, E-ELEC, for customers with 13

qualifying technologies, which include electric vehicle (EV) charging, energy 14

storage and electric heat pumps for water heating or climate control. 15

In order to encourage potentially eligible customers to take advantage of 16

E-ELEC, PG&E plans to conduct proactive outreach and education to inform 17

customers, including early adopters, about the new rate and its benefits. 18

Customer outreach on E-ELEC is planned to be delivered through various 19

channels to reach the initial early-adopter group. Since these customers are 20

expected to be difficult to identify and may evolve over time as adoption of the 21

eligible technologies increases, it is important that the outreach approaches 22

remain flexible to be adjusted based on these dynamics. 23

PG&E plans to target customers who may be more likely to be early 24

adopters of technology using a propensity model and will send an annual 25

awareness email regarding the rate plan and other relevant programs. While it 26

will be nearly impossible to target these communications at the individual 27

customer level, certain attributes of customers such as geography and 28

1 The three investor-owned utilities’ respective 2018 RDW Applications (17-12-011,

17-12-012, and 17-12-013) were subsequently consolidated. 2 See D.20-03-003, p. 52, whose May 1, 2020 original deadline was extended to May 5,

2020 in a letter issued April 27, 2020 by the California Public Utilities Commission’s Executive Director.

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inclination to be early adopters of technology can help narrow the focus to 1

customers most likely to consider this rate plan. 2

B. Rate Plan Awareness, Education, and Adoption 3

PG&E’s initial plans include a three-pronged approach to help raise 4

awareness for the new rate plan via an umbrella platform, coupled with more 5

targeted channels and tactics. The three prongs are as follows: 6

1. Integration outreach to residential customers – As with other rate plan 7

options and promotion of rate plan choice, PG&E plans to promote E-ELEC 8

within integrated communications and PG&E-owned channels. PG&E 9

already does this with its ongoing promotion of rate plan choices, where a 10

customer is made aware of and encouraged to learn more about available 11

rate plans and explore which one could be best for their household. A 12

similar type of outreach can occur with promotion of the new rate plan when 13

it is launched in channels like the monthly residential digital newsletter, and 14

cross-promoted within relevant communications, such as EV and/or solar 15

communications, when appropriate. Additionally, it will be included with the 16

suite of rate plan options education on PG&E’s website, which currently is 17

also promoted with “Rate Choice” messaging paid digital media. When 18

featuring various aspects of this rate plan, such as peak hours, it will also be 19

highlighted that this rate plan includes a fixed charge. Highlighting a fixed 20

charge will help customers understand why they may see this charge on 21

their bill and take it into account when deciding whether to adopt this rate 22

plan for their household. While this is the way we will approach fixed charge 23

education for this particular rate plan, it is not the sole way we would 24

communicate a fixed charge across other or all rate plans if that is 25

eventually adopted. 26

A successful example of this type of integrated approach to rate plan 27

awareness and outreach is the 2019 Rate Options campaign. Using PG&E 28

channels and targeted digital ads, the campaign garnered more than 29

(PG&E-5)

2-3

50,000,000 impressions in that year and helped to contribute to a rise in rate 1

options awareness.3 2

2. Targeted direct outreach – Send an annual email to customers to raise 3

awareness of the new rate plan and other TOU rate plans with guidance on 4

where to learn more and how to take action. The communications will target 5

customers who are likely to be early adopters of storage and other 6

technologies that qualify for E-ELEC. 7

3. Point-of-purchase – Establish collaboration with manufacturers and/or 8

sellers/contractors of eligible E-ELEC technologies to provide rate plan 9

talking points and rate plan awareness inserts at point-of-purchase/ 10

installation. This tactic can also be leveraged with Energy Savings 11

Assistance contractors at installation/upgrade of equipment when 12

appropriate. PG&E plans to target customers more narrowly and precisely 13

when they are in the decision-making, purchasing, and installation phases of 14

their technology adoption. 15

3 The latest ME&O tracker results from the end of 2019 show that PG&E’s rate

options/TOU communications had a significant impact on residential customer awareness of TOU. More customers are now saying they are on a TOU rate, and there was a doubling of the number of customers aware that “TOU plans are available to all customers” - from just 21 percent early in 2019 to 40 percent of customers later in the year. Nearly two-thirds of customers are now aware of a TOU rate (65 percent) – making awareness of the TOU rate on the same level as awareness of the tiered rate (66 percent). Awareness of rate plan choices rose significantly from 36 percent to 43 percent, and there was also a significant increase in understanding of how TOU affects bills: now 50 percent of customers understand that your bill on TOU is based on both how much energy you use and the time of day you use it.