SCE Dynamic Rate Pilot (Flexible Pricing Rate Pilot)
In response to Gov. Newsom’s emergency proclamation in 2021 to ‘ensure the reliability of electrical service during extreme weather events,’ the California Public Utility Commission (CPUC) authorized SCE to demonstrate the CPUC led CalFUSE dynamic pricing framework (linked here), using TeMix Incorporated’s Software-as-a-Service (SaaS) solution. The Pilot, also known for customers as the Flexible Pricing Rate Pilot, is designed to demonstrate the CalFUSE dynamic pricing concept which has been developed to provide a near term solution to address the longer-term challenges associated with the State’s energy transformation, help integrate renewables, reduce GHG emissions, improve system reliability, and reduce or minimize cost of service.
SCE intends to conduct a comprehensive demonstration study of the CalFUSE framework across multiple use-cases and assess how the three-part policy framework can deliver standardized price access, dynamic electricity prices linked to real time grid conditions & economics, and customer options to manage and optimize energy usage and bills. SCE also believes that the demonstration can provide a forum to explore options for both transactive price models and real time pricing with other parties and stakeholders, and demonstrate how new forms of distributed energy resources can act as both customer assets and grid interactive resources.
The CalFUSE concept will develop a novel approach to demand flexibility management, expanding on the solutions needed for future electric system reliability while meeting the executive guidance of Gov. Newsom’s order to improve system reliability. These goals include:
- The challenges associated with the ongoing transformation of the electricity system resulting from the expected high penetration of renewables, electrification of buildings and transportation, and deployment of behind-the-meter (BTM) distributed energy resources (DERs),
- The significant opportunity involving demand-side flexibility enabled by widespread electrification and customer DER deployment, and its potential to integrate renewables and reduce GHG emissions, improve system reliability, and reduce or minimize cost of service, and
- The limitations associated with the traditional approach to demand response and retail rate design that curtail the demand-side potential described above, suggesting a need for a fresh approach.
Below is a link to the CPUC decision authorizing SCE to conduct the Dynamic Rate Pilot
CPUC Decision D.21-12-015 (issued December 6, 2021)
CPUC Decision 21-12-015 Attachments
We grant SCE authorization to use TeMix’s RATES platform for a three-year (2022-2024) dynamic pricing pilot in SCE’s territory, and grant SCE its requested $2.5 million for the pilot. The pilot is intended to assist in assessing the costs and benefits of real-time rates, including required infrastructure, manufacturer interest and customer impacts. SCE shall administer the pilot under its DR Emerging Markets and Technologies program authorized in D.17-12-003.
The Flexible Pricing Rate Pilot allows SCE Residential and non-Residential customers with select electric devices, such as programmable communicating thermostats, energy storage devices, or an electric vehicle, to participate. The Pilot rate is based on dynamic, real-time energy market prices and will test the capability of devices to shift electricity to times of day when electricity is less expensive.
SCE will work through Automation Service Providers (ASPs) with existing relationships with these customer types and previously installed automation software or hardware at these customers’ dwellings to streamline customers’ enrollment in the pilot.
At the time enrollment is completed for participation in this demonstration, each customer will be provided a tailored subscription for their monthly electricity use; based on an analysis of their historical usage. Then, throughout the pilot, via their ASP, the customer will receive dynamic energy rates. The dynamic rate is a reflection of grid conditions. Customers will be able to either buy or sell transactions leveraging their subscription to better meet their operational needs against the needs of the local grid conditions.
The key operational tasks of the demonstration will be to automate the creation of dynamic prices for the generation and delivery components of a transactive tariff, and present these composite dynamic hourly prices via an internet-based secure pathway to be accessed by retail customers, wholesale market participants, and automated services platforms for distributed energy resources (DERs).
Customers and their smart devices would be connected to the TeMix cloud platform to receive price tenders either directly, via local management, or from aggregated management signals from third-party automated services platform clouds via Internet/Wifi/LTE to the secure receivers at the customer site. Smart devices include, but are not limited to:
- Devices with controllable loads, such as thermostats, heat pump water heaters, pool pumps, etc.
- An energy management system
- A behind-the-meter battery
- An electric vehicle
The pilot was authorized for three years (2022-2024), starting no later than May 1, 2022, and may be permanently extended after the initial period pending approval by the CPUC.
Billing and Incentive Payment
While on the Flexible Pricing Rate Pilot, customers will remain on and continue to be billed in accordance with their Otherwise Applicable Tariff (OAT). Concurrently, TeMix will configure the platform to calculate and provide monthly bill amounts based on the hourly price signals provided to customers participating. Any customer savings recognized from the hourly price signals compared to the customer’s OAT will be provided to the customer on at least an annual basis.
Per D.21-12-015, the CPUC encouraged SCE to use a “shadow bill” to limit any impact on customers.
At the end of 12 months of participation, the monthly bills paid by the customer will be compared against the dynamic, real-time rate bills, and if money is saved on the dynamic rate, then an incentive payment will be given through your ASP for the difference. In no case will customers participating in this pilot will be required to pay more than their monthly bill. Customers who are on Net Energy Metering plans will receive their compensation at the end of their relevant period, even if it comes before the 12 months. Customers are free to leave the pilot at any time — at that point, they will receive their compensation, if any, within 12 weeks of their departure from the pilot.
SCE’s Advice Letter (filed January 5, 2022)
Advice Letter 4684-E: Southern California Edison Company’s Dynamic Rate Pilot Pursuant to Decision 21-12-015
SCE’s Supplemental Advice Letter (filed April 25, 2022)
Advice Letter 4684-E-A: Supplemental to Tier 2 Advice Letter for Southern California Edison Company’s Dynamic Rate Pilot Pursuant to Decision 21-12-015
CPUC Approval of SCE’s Advice Letters 4684-E and AL 4684-E-A (received April 29, 2022)
Non-Standard Disposition Letter regarding SCE’s forthcoming Dynamic Rate Pilot (Pilot) pursuant to Decision (D.) 21-12-015