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Educator Suggests Electricity Price Plan
Santa Barbara News-Press
by Ann Griffith
April 10, 2001

To save energy and help prevent blackouts, residents should be charged for electricity based on the time of day they use it, according to a UCSB dean who has studied energy.

Dennis J. Aigner, acting dean of the Bren School of Environmental Science & Management, helped with a 1979-81 study of utility pricing headed by Southern California Edison. The pricing system resulted in residential customers conserving energy, he says.

What's more, some of the 600 participants reduced use during the critical daytime peak period by up to 19.2 percent, behavior that could help prevent blackouts this summer, Aigner said.

So he is suggesting the pricing measure to help the state get through its latest energy crisis.

Lawmakers have resumed talks about the concept after the Public Utilities Commission stopped short of requiring the change for residents in the past.

The time-of-use pricing is already mandatory, however, for the largest commercial customers. But an Edison spokesman had a lukewarm reaction Monday to the proposal for residents because it would require installing new meters.

Aigner is writing guest editorials in some the state's largest newspapers to sway public opinion to favor the concept that would force only the largest residential customers in California to pay more during peak hours. "Let prices fairly reflect the costs of generation," he argues.

"It is true that big customers and big building have been on time-of-use rates since the '70's," Aigner said in an interview. "It was only an issue of: How far down in the pricing system do you take that?"

The Public Utilities commission so far has only allowed utilities to offer voluntary programs for residents. In them, residential customers are charged more for using their washing machines in the middle of the afternoon when air conditioners are on overdrive. They are rewarded with a lower rate for doing laundry in the evening or early morning.

A few Edison residential customers volunteer for the time-of-use rate. During the summer these customers pay 40 cents a kilowatt hour from 10 a.m. to 6 p.m. weekdays and 2 cents a kilowatt hour other times.

That's compared to about 13 cents a kilowatt hour charged regular residential customers.

Aigner reasons that pricing should be mandatory for the largest residential customers, who have air conditioning and other discretionary electricity uses that the most modest apartments lack. It would be hard for the smallest customers who already use less to cut back.

Aigner argues that new time-of-use meters could be affordable, less than $200, which is the cost of even more sophisticated meters used in Israel, Aigner said. The largest residential customers could save more than that in their monthly bills and could easily pay for the meters, he said.

Edison isn't pressuring the PUC to require the change given that it would cost more-either for the customer or the ratepayer, or both-at a time when rates and expenses are already going up, said Edison spokesman Steve Conroy.

"It's a balance between the value of such a program and the cost," Conroy said. "If the PUC requires a program to be implemented, we stand by ready to do that."

The Office of Ratepayer Advocates, an independent division of the PUC, supports the change, in concept. Before the residential customers are put on mandatory time-of-use pricing, more industrial, commercial and agricultural customers should be switched, said Sean Casey, a regulatory analyst with the Office of Ratepayers.

There are also questions about how the program for residents should be implemented and when.

"The details are what have to be worked out," said Casey, who is watching a handful of bills regarding time-of-use pricing work their way through the state Legislature along with a slew of other energy-related bills.