What is Peak Day Pricing?

Higher Electricity Rates for PG&E Central Valley Ag Customers

Peak Day Pricing (Peak Day Pricing) is a new electricity-pricing program from Pacific Gas and Electric (PG&E). It is primarily for PG&E customers with:

  • Electric loads over 200 kilowatts (kW) (approximately 250 horsepower pumps)

Peak Day Pricing has an upside and a downside:

  • Upside = Peak Day Pricing participants will enjoy lower power costs most of the year
  • Downside = Much higher charges if customers use power during critical peak demand events

Use our online Peak Day Profiler to see if you’ll be subject to Peak Day Pricing

Energy planners use weather and power usage data to forecast California's power needs. Peak Days are declared when the demand for electricity threatens to outpace supply and PG&E responds to a call to reduce power usage from the California Independent System Operator Corporation (ISO):

  • Typically occur between 11 am and 7 pm for 1 to 4 hours in duration.
  • Often during hot summer afternoons when the need for power rises dramatically in heavily populated areas and affects PG&E's entire service area.
  • Sometimes due to electric grid emergencies or maintenance outages.

The ISO is an organization formed under the Federal Energy Regulatory Commission (FERC) to coordinate, control and monitor the operation of California's electric power system. Other states have similar independent power operations administrators.

Warning: Rate Changes and Peak Day Pricing Surcharges Ahead

TOU vs. Peak Day Pricing Rate Comparison Example
AG5C Rate Schedule TOU Rates Peak Day Pricing Credits/Charges Peak Day Pricing Rates
On-Peak Demand Charge $12.68 - $4.53 $8.15
Part-Peak Demand Charge $2.60 - $0.86 $1.74
Peak Demand Energy Charge N/A + $1 per kWh Surcharge $1 per kWh of Usage

For customers with service points at or above 200 kW, PG&E will apply a surcharge on electricity used during critical Peak Demand periods. The charge will be an extra $1 per kilowatt hour (kWh) on top of the standard power rates according to your rate schedule.

  • The result will be at least a 10X increase over your lowest rate.
  • For example, the average charge for a 200kW service point running for one hour would jump from $24 per hour to $224 per hour!

TOU Rates

TOU Off-Peak rates for service points under 200kW are approximately two-and-a-half times less than On-Peak charges from noon to 6 pm on weekdays. Many TOU customers may opt to schedule loads to run during Off-Peak hours and on weekends when average rates are only $0.07 rather than $0.18 per kW on-peak. Plus, electrical loads that are running during Peak Demand Periods will automatically incur a monthly demand charge of $12.86 per kW. So a 100 hp pump (approx. 76 kW) that runs between the On-Peak times of noon to 6 pm, would incur a monthly demand charge of $977.36.

Infinity Farm Information System
The Infinity Web-to-wireless hardware and software can help you adhere to strict TOU schedules to avoid high rates. This PG&E-endorsed remote control /monitoring equipment enables Ag customers to use any phone, Smartphone or Internet-connected computer to:

  • Turn service points on and off (e.g., electric pumps, motors or compressors)
  • Monitor electricity usage
  • Monitor water usage
  • Monitor equipment health
  • Monitor soil moisture (optional soil probes)
  • And much more…

Peak Day Pricing Rates

Under Peak Day Pricing, customers will pay lower rates for service points over 200kW if they agree to pay much higher prices — including surcharges — when they use electricity when PG&E is facing critical peak demands.

According to PG&E, customers enrolled in the Peak Day Pricing program will be offered "bill protection" for 12 months. PG&E will compare charges under the Peak Day Pricing plan to what would have been charged under the applicable TOU plan. If the costs have been increased above TOU levels, customers will receive bill credits to “true up” the annual charges to be equal to, or less than, the previous year's total charge for electrical service.

This bill protection feature allows customers to spend a year on the Peak Day Pricing plan at no risk. Note that this offer extends for only the first year a customer is eligible for the Peak Day Pricing program.

Note that customers can opt out of the Peak Day Pricing plan for one year up until just two days before their effective Peak Day Pricing start date.

For a customer with a 200 kW (250 hp) pump that needs to run through a four-hour Peak Event, the bill impact would be $800 (200kW X $1 per kWh X 4 hours = $800). With up to 15 events anticipated by PG&E each summer, the total impact could be up to $12,000 for each pump of this size ($800 X 15 = $12,000).

In some instances, customers will benefit by participating in the Peak Day Pricing program instead of enrolling in a Demand Response program despite the protection from surcharges offered by Demand Response programs. Indicators of Peak Day Pricing suitability include:

  • Strong On-Peak and Part-Peak usage throughout summer months.
  • Ability to shut down loads for up to 15, 4-hour critical Peak Demand Events throughout the summer.
  • Rate schedules other than "AG," agricultural rates, which could provide extra credits and incentives.

Use our online Peak Day Profiler to see if you’ll be subject to Peak Day Pricing

Peak Energy Agriculture Rewards (PEAR) Incentive Program

Peak Energy Agriculture Rewards (PEAR) Incentive Program is a PG&E-endorsed Demand Response program developed to incent utility customers to use less electricity when overall demand is critically high. As a PG&E aggregator, PEAR is authorized to offer a variety of programs for customers interested in earning incentives for reducing or shutting down electrical loads and avoiding the high cost of electricity during critical Peak Demand periods.

Participating customers receive notifications about 24 hours in advance of an event. This way they can determine whether they want to opt in or out of the event based upon the nature of their loads. For example, an irrigator may determine it's okay to shut down a large irrigation pump for 4 hours. But a tomato processor would decide to opt out during a busy harvest period.

Transitioning to Peak Day Pricing or Opting Out

PG&E plans to enroll automatically customer service points that fulfill the following criteria:

  • Account receives bundled service from PG&E.
  • Customer is currently on an Agricultural rate from PG&E.
  • Customer has an interval meter (i.e., a SmartMeter™ device) and 12 months of billing data from that meter on file.
  • Customer has a demand of 200 kW or more for three consecutive months in the 12 months.

See the PG&E Web site for more information on automatic transitions.

Peak Day Pricing enrollment will begin Feb. 1, 2011 and continue as new meters are installed and usage data is gathered by PG&E. However, there are two exceptions:

* Smart Meters and Interval Meters are capable of reading loads and transmitting through wireless networks to PG&E. Customers can view data on the secure InterAct Web site. Customers without interval or Smart Meters will be enrolled after new meters are installed and 90 days of data are collected.

  • Avoids Peak Day Pricing surcharges that may increase costs by as much as 10X. For example, PG&E charges may jump from $24 per hour to $224 per hour to operate a 250-hp irrigation pump during Peak Demand Events.
  • Pays annual incentives averaging $5,000 per service point to Ag customers who volunteer to shut down service points during Peak Demand Events (shut down 1-4 hours during a Peak Demand Day from 11 am to 7 pm, not more than 24 hours total in one month).
  • Provides up to $20,000 in free remote control / monitoring equipment per service that enables Ag customers to use any phone, Smartphone or Internet-connected computer to:
    • Turn service points on and off (e.g., electric pumps, motors or compressors)
    • Monitor electricity usage
    • Monitor water usage
    • Monitor equipment health
    • Monitor soil moisture (optional soil probes)
    • And much more…

Participating customers receive notifications about 24 hours in advance of an event. This way they can determine whether they want to opt in or out of the event based upon the nature of their loads. For example, an irrigator may determine it's okay to shut down a large irrigation pump for 4 hours. But a tomato processor would decide to opt out during a busy harvest period.

Transitioning to Peak Day Pricing or Opting Out

PG&E plans to automatically enroll customer service points with:

  • Smart Meter or Interval Meter installed*
  • 3 consecutive months of demand at or above 200 kW over the previous 12 months

Peak Day Pricing enrollment will begin Feb. 1, 2011 and continue as new meters are installed and usage data is gathered by PG&E. However, there are two exceptions:

  • If you have enrolled in a Demand Response program like Peak Energy Agriculture Rewards (PEAR) Incentive Program.
  • You can "opt out" of the Peak Day Pricing program for 1 year (until 2012); however, you must notify your PG&E representative at least two business days prior to your scheduled enrollment date.
    • Once interval or Smart Meters have been installed and you become eligible for Peak Day Pricing, you will be given 45 days to opt out of the program, however, you must notify your PG&E representative at least two business days prior to your scheduled enrollment date. 

Get expert advice from an energy specialist about how you can benefit from the Peak Energy Agriculture Rewards (PEAR) program from EnerNOC: