California Electricity Savings Opportunity

By May 19, 2020 News

The cost of electricity continues to rise as the state of California pushes towards its goal of 100% renewable power. In fact, PG&E’s commercial rates are approximately 10% – 15% higher today than they were just one year ago depending on customer class. This increase equates to hundreds of thousands of dollars a year in additional costs. During these unprecedented times, Energy Edge believes finding long-term operating cost reductions is even more critical. Below are two opportunities to both save money and control the cost moving forward.

Direct Access:

Direct Access (DA) is an optional service that allows eligible customers to buy electricity directly from non-utility competitive providers known as electric service providers (ESPs). The utility (PG&E, SCE, SDG&E) continues to transport and deliver electricity to all customers on DA service. You should expect no change in reliability of service levels from the utility.

DA provides commercial and industrial customers with many benefits. These include:

  • The ability to control generation costs through forward purchases and electricity products that fit their specific usage profiles and risk tolerance
  • Savings versus utility generation rates of 10-20% in many cases
  • Proper assignment of contractual risk
  • Access to wholesale market opportunities, including offsite renewable generation

 Why now? Two Reasons:

  • The CPUC utilized the 2018 Direct Access lottery waitlist to allocate the space for customers leaving utility service for 2020. Energy Edge fully expects them to implement a similar process for the next allocation of space. Therefore, applying in 2020 gives you the best opportunity to enter DA in 2022.
  • Exit fees associated with entering Direct Access continue to move up each year. The sooner you exit bundled service, the sooner this becomes a “fixed” cost, not subject to continued increases.

Applications for Direct Access service are due in June.  Energy Edge can help you understand the opportunity and assist with the application process.

Behind the meter generation:

Utility companies (PG&E, SoCal) have moved all commercial and industrial customers on to new Time-of-Use rates. These rates incentivize large users to avoid using electricity during the highest priced time periods. However, for many consumers, changing their usage pattern is either: 1) not an option or 2) cannot be done achieved without operational costs or compromises.

A solution Energy Edge has evaluated is utilizing Solar behind the meter. Solar creates a unique load profile which offsets the amount of kWh’s purchased during high priced time periods. Below is the Summer B-20 rates and time periods for PG&E:

PeriodTime$/kWh
PeakDaily: 4p – 9p, including weekends & holidays$0.1508
PartDaily: 2p – 4p, 9p – 11p, including weekends & holidays$0.1222
OffAll other hours$0.1022

 

Avoiding Peak and Part Peak time periods during the summer (June-September) is a natural fit for Solar. A variety of factors determine the economic viability of a particular project, however Energy Edge has evaluated and implemented solar power purchase agreements that have yielded as much as 20% savings in the first year of operation. At the end of the power purchase agreement term, you will have the opportunity to purchase or renegotiate the terms in order to capture further operational value. In a typical power purchase agreement, the financial partner will construct, own, and operate/maintain the facility.

Energy Edge is here to answer any questions and help you evaluate and execute on this opportunity.