The California Energy Commission (CEC) today adopted updates to the state’s load management standards that will give consumers more timely and accurate information on electricity costs, to help them manage energy use — especially around times when demand is high.
As the state’s primary energy policy and planning agency, the CEC has statutory authority to adopt standards to help shift energy use. Load management offers California another tool to support grid reliability particularly in late afternoon and evening when demand increases as the sun goes down. Today’s action is expected to produce $243 million in net benefits over 15 years and could reduce annual peak hour electricity use by 120 GWh, equivalent to powering 20,000 average California homes for a year.
The updates will help customers take better advantage of utilities’ lower time-dependent rates so smart appliances can be used and buildings can automatically respond to more frequent rate changes that reflect electricity grid conditions. This will save consumers money by shifting usage to times of cheaper or abundant electricity. In addition, a better-balanced grid slows the rise of electricity costs, strengthens the grid, reduces the need for more fossil fuel plants and avoids electricity transmission and distribution congestion.
“This update is a huge leap into the 21st century, using digital approaches to unlock benefits for consumers by enabling them to automate their electricity use around cheaper rates and changing grid conditions,” said Commissioner Andrew McAllister. “Automated load management reduces energy bills, makes better use of abundant renewable energy resources available during the day, and strengthens grid reliability.”
Under the updated standards, which will take effect April 1, 2023, Pacific Gas and Electric Company, Southern California Edison Company, Sacramento Municipal Utility District, San Diego Gas & Electric, Los Angeles Water and Power, and large community choice aggregators will be required to make the following improvements:
- Develop retail electricity rates that change at least hourly to reflect grid costs and greenhouse gas emissions and are approved by their governing board.
- Maintain up-to-date rates in a database called the Market Informed Demand Automation Server (MIDAS), which will provide a central repository for all rate information.
- Educate customers about time-dependent rates and automation technologies to encourage their use.
The changes help advance energy equity by introducing fairer compensation mechanisms, creating bill savings for customers with flat loads in disadvantaged communities or who are able to shift usage to when electricity is cheaper, and lowering energy costs for all customers by reducing peak electricity demand.
Since 1978, the CEC encouraged load management through utility air conditioner cycling programs that automatically reduce use at commercial or industrial sites, for example, during emergency summer peak loads. As technology has advanced over time, more appliances such as thermostats, pool pumps and residential water heaters have been automated to reduce use or shift time of use from high-demand hours, in response to signals from utilities and energy aggregators.
Learn more about the 2022 load management rulemaking here.
News item from the California Energy Commission