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Impacts of Time-of-Use Rate Changes on the Electricity Bills of Commercial Consumers

Changes in the profile of prices in wholesale electricity markets prompt utilities to redesign their tariffs and adjust their time-of-use periods to ensure a more adequate cost recovery. However, changing the rate structures could adversely affect commercial consumers by increasing their electricity bills and hindering their ability to reduce costs using techniques like net energy metering. As time-of-use periods are adjusted, consumers will need to rely on the flexibility of distributed energy resources to achieve cost reductions. This paper explores the effect that Pacific Gas and Electric Company's redesigned rates have on the electricity bills of consumers with different demand profiles. Sensitivity analyses are conducted to examine the effect of asset sizing on reducing costs under each tariff.