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SCE has two rate structures commonly used by commercial customers: GS-1 and GS-2. As part of our new website roll-out, we have been exploring the use of interactive data visualizations and we decided to create one to explore the impact of demand charges under SCE’s commercial rates.
Here’s some background. SCE’s smallest commercial customers, those whose peak power demand is 20 kW or less, are assigned to the GS-1 rate. This is a rate structure very similar to what one has at home - charges are based on the total amount of energy used in a month (as measured in kWh). Moreover, this is a flat rate structure - every kWh costs the same, and does not account for when it is consumed. (NB: this is changing; over the next year SCE’s commercial customers will be moved to a time-of-use rate structure, but for now, most are not. We will have more to say about SCE’s commercial time-of-use rates later.)
The GS-2 rate structure, on the other hand, includes all commercial customers with peak power demand between 20 and 200 kW - a very large segment of the commercial customer base. For them, an additional rate component is introduced - peak power charges, better known as demand charges. While GS-2 customers pay significantly less per kWh of usage, they more than make up for it in demand charges. Indeed, during the summer months, GS-2 customers pay for demand charges twice!
The net effect of all this is that GS-2 customers generally pay significantly higher bills than they would if their rate was based on usage alone. To explore that, we created this visualization. Derived from the actual rate tariffs (which are linked to on the site), this allows you to compare what your annual bill differential would be against a variety of scenarios. Since most commercial customers have a peak demand significantly higher than their average, that is the first “knob” to adjust - as average demand becomes a smaller percentage of peak, the differential increases.
To try this for yourself, click on the image above to go to the visualization page.
We would love to hear your thoughts about this tool, as well as SCE’s commercial rates. Please let us know what you think in the comments.