BCSEA and VEVA Support Optional Residential TOU Rate
December 4, 2023
By Bill Andrews and Tom Hackney
BCSEA and the Vancouver Electric Vehicle Association jointly supported BC Hydro’s proposed Optional Residential Time-of-Use (TOU) rate application to the BC Utilities Commission. In a final argument filed October 25, 2023, BCSEA and VEVA told the BCUC that the time has come for BC Hydro to introduce an optional TOU rate for residential customers.
The purpose of the optional residential TOU rate is to encourage customers to shift electricity usage from the times of day when BC Hydro’s system peak occurs (late afternoon and early evening) to other times of day when total electricity use is lower (especially overnight). Successful “load shifting,” as it is called, will allow BC Hydro to postpone large capital investments, thereby reducing the costs that customers pay for in their rates and reducing the social and environmental impacts of upgrading transmission lines.
The peak demand on BC Hydro’s system has been breaking records in recent years and is forecast to continue rising. BCSEA and VEVA noted that EV charging is forecast to become a significant source of this rising peak demand, unless EV owners switch to charging overnight or during the off-peak times of day.
BCSEA and VEVA told the BCUC that the proposed optional residential TOU rate would help to promote EV adoption in BC. They concluded that the optional rate would appeal to residential customers who already own, or may in the future purchase, an EV that is charged at home. BCSEA and VEVA expressed confidence that EV owners want to do their part to prevent EV charging from imposing an unnecessary financial burden on BC Hydro and its customers. In addition, they said, EV owners are eager to benefit financially (albeit modestly) from charging their EV overnight rather than during the evening peak period.
In its original proposal, BC Hydro called for net metering customers to be ineligible for the optional residential TOU rate. After questioning from BCSEA, VEVA and other interveners, BC Hydro relented and revised the proposal to include net metering customers. To be clear, the optional residential TOU rate will be applied only to electricity purchased by net metering customers from BC Hydro, and not to customer generation provided to BC Hydro.
A key aspect of the optional residential TOU rate is that it is optional. No one has to participate if they wouldn’t benefit financially or for whatever reason choose not to participate. However, the proposed rate will benefit all BC Hydro customers, whether they participate or not.
The proposed optional rate fits on top of the existing Residential Inclining Block (RIB) rate, rather than replacing the RIB rate. Participants in the optional residential TOU rate will get a five cents/kWh credit for consumption during the Overnight period and a five cents/kWh surcharge for consumption during the Peak period. With this design, residential customers can opt into the optional residential TOU rate and benefit financially regardless of whether they are low-consuming customers who never or only occasionally see the RIB’s Tier 2 rate or high-consuming customers who routinely see the Tier 2 rate.
Meanwhile, the RIB is once again up for re-examination. Back in 2021, BC Hydro engaged with stakeholders about flattening the RIB rate. However, BC Hydro shelved that initiative and in March 2023 BC Hydro applied for approval of the optional residential TOU rate. In late November 2023, after completion of the final arguments in the optional residential TOU rate proceeding, BC Hydro began a new round of stakeholder engagement on whether and how to introduce optional alternatives to the RIB rate. BC Hydro aims for an application to the BCUC in June 2024 that will address the RIB rate, net metering, and the rates paid by customers in non-integrated areas (remote communities not connected to the electrical grid.) BCSEA is actively participating in the engagement.