The TOU Transition

SCE finds moving customers to TOU rates via positive experiences mitigates load

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Time-of-use (TOU) and other innovative rate designs are critical to managing an increasingly complex grid, achieving decarbonization goals, and integrating DERs. To achieve meaningful results, more energy customers need to adopt them. According to the U.S. Energy Information Administration, while TOU rates are available to 62% of U.S. residential customers, only 7.3% of customers are enrolled in these plans. 

Southern California Edison (SCE) wanted to get its customers on new rates in a way that ensured a positive experience and delivered impact to the business. The utility's transition began with an opt-in pilot in July 2016 and a default pilot of 400k customers in 2018. The full TOU rollout started in Oct 2020 and ran through June 2022, with over 1.9M customers defaulted.

SCE knew that managing a program of this scale would require an analytics-driven approach and a focus on putting customers first. The result of its approach was strong engagement and an added benefit: significant peak load reduction in August 2022, making it equivalent to the third largest program in SCE's DR line up. The program demonstrated that SCE customers understand that when they use energy is just as important as how much they use.

California's IOUs rolled out default TOU rates for residential customers in order to reduce demand during peak periods, reduce system costs, and improve grid reliability. While TOU rates can help achieve these goals, to be effective, they require significant customer education to avoid customer dissatisfaction with the rate, and with the utility as a whole. 

During the summer of 2022, SCE used its innovative Rate Coach Program, powered by Oracle’s "Opower Behavioral Load Shaping" solution, to send specialized weekly communications to approximately 800,000 customers to help mitigate the effects of a record-breaking heat wave. SCE had also run a smaller pilot program for a subset of about 60,000 of these customers in 2021. A survey among the 2021 customers found that customers who received weekly Rate Coach e-mails had increased awareness of TOU rates verus customers who only received standard e-mail communications (69% vs. 59%) and were more likely to correctly identify TOU as their current rate (52% vs 45%).

 TOU Impacts

• An increase in TOU enrollment to 2.6 million residential customers on TOU rates, representing 58% of SCE's residential customers as of Feb 2023.
  
  
• Awareness of TOU rates by residential customers eligible for the TOU transition jumped from 46% in Spring 2020 to 77% in Fall 2022, exceeding the performance target of 70%.
  
  
• Customer awareness of residential rate plans that help save money, by those customers eligible for the TOU transition, jumped from 45% in the Spring 2020 to 59% in Fall 2022.
  
  
• Understanding how electricity use can impact their bills by residential customers eligible for the TOU transition jumped from 5.63 out of 10 in the Spring 2020 to 6.38 out of 10 in Fall 2022.
  
  
• Engagement with SCE's tool has been strong and sustained, even after the TOU transition was completed. Residential use of RPCT is strong and continues to grow with over 450,000 logins over the past two years.
  
  
• Demand flexibility benefits are also strong. At the peak August load in 2022, Residential TOU (4-9PM and 5-8PM peak rates) was expected to provide up to 75MW of load reduction. Within SCE’s DR line-up, this is equivalent to the utility's third largest program.
  
  
• The TOU transition and the related engagement strategies initiated by SCE, such as rate comparisons, helped customers with DERs to get on the best rate for them. Now, one of SCE’s fastest growing rates is TOU-D-PRIME which is designed for customers with an EV, heat pump water, space heater, or battery storage. EV customers who move to the prime rate tend to shift 20% of their energy usage away from peak times, which helps to support the move to renewable energy.
  
  
• SCE experienced an average of more than 9 MW of daily load reduction in the middle of its peak period during August and September 2022. It also experienced 14 MW of load reduction in early September between 5 and 7 pm, which were critical peak hours when temperatures topped 110 degrees F in some parts of SCE's service territory.