In an effort to stabilize future revenue, Seattle City Light plans to roll out rate-design pilot programs in the coming months, using authority that sunsets in 2028 granted by legislation Seattle City Council passed Sept. 30.
Pursuing pilot programs is a key step to SCL redesigning its rates and stabilizing revenue in the early 2020s, General Manager and CEO Debra Smith told Clearing Up.
Given SCL's goal to overhaul its rates by 2022, Smith wants to move quickly. "I hope to stand up the first pilot in the next 60 days," she said.
The utility plans to launch four pilot programs, the first aimed at low-income customers whose electricity bills are more than 6 percent of their respective incomes.
Analysis by SCL shows that customers with the highest energy burden typically have above-average energy consumption and make less than $25,000 a year. The one-year program will be limited to 300 participants, and will include a low fixed charge per kilowatt-hour, a fully subsidized monthly service charge, account balance management help, and subsidized energy efficiency improvements to participants' homes.
A second pilot would test a residential time-of-use program to test incentives for electric car owners and other high-use households during times when costs of energy and delivery are high. Participants would get a rebate for nighttime consumption and a penalty for excess use during peak demand hours. The pilot is slated to start in early 2020.
Time-of-use rates "are a critical part of our market strategy," Smith said.
They could be rolled out to all residential customers, on an opt-in basis, as early as 2021.
Across the country, few eligible customers sign up for time-of-use rates when offered. Only 3.4 percent of customers opted in when given the opportunity, according to The Brattle Group's analysis of U.S. Energy Information Administration data (CU No. 1908 ).
Seattle City Light customers, though, tend to be very engaged. "Almost 50 percent of our customers have paperless bills," Smith said.
Even if SCL customers were tuned out, introducing time-of-use rates on an opt-out basis "is not politically feasible," she said.
The third pilot would test commercial electrification incentives. The program would use time-of-use rates and demand charge incentives to better understand the financial challenges facing high-speed charging. The utility is working with King County Metro to install chargers in the transit base in Tukwila in spring 2020.
The last pilot would explore load shifting with a handful of SCL's large industrial customers with high energy-intensive operations. Rate incentives will be offered to participants that agree to curtail consumption at SCL's discretion. The utility is working with BPA to implement the project, which is slated to run for two years.