Editor's note: If you would like to help UCAN track SDG&E's deployment of Smart meter accuracy and customer service, you can participate in our MeterWatch HERE.

If SDG&E gets its way, 120,000 San Diego businesses will be forced into TOU, or "Time of Use" pricing in 2013. Meanwhile, consumers will  have the option of participating in the plan if the proposed rate change, filed on July 6. is approved by CPUC, the California Public Utilities Commission.  

SDG&E is requesting approval of the new plan because daytime power can cost as much as ten times more than the cost of power later in the evening on hot days. On average, about eight times a year, SDG&E must produce energy on an emergency basis from costly peaker plants in order to avoid rolling blackouts. If enough consumers and businesses reduce their demand during brief periods of peak electricity use, the cost savings could be passed onto ratepayers ... in theory.

The proposed rate is only possible through the federally mandated deployment of smart meters. Smart meters are computerized meters that have the ability to tell SDG&E how much energy you are using as soon as you turn on an electrical appliance. Under the proposed plan, residential users would get a discount for shifting their electric use from daytime hours to evening hours when there is lower demand.

According to the North County Times, you could save as much as 15 cents on a load of laundry by waiting until the weekend to do it.

UCAN is skeptical of the plan. In yesterday's San Diego Union Tribune, UCAN's Executive Director was quoted as saying that under the new proposal the incentives are not good enough to compel people to dramatically change their energy use.  In a similar story by Eric Wolff in the North County Times, UCAN's Executive Director Michael Shames said: "A battle is brewing. Tiered pricing is still an important component to electric rates. There is no other effective way of rewarding those who conserve than by offering lower rates to those who use less."

1. The concept of real-time pricing for electricity is one of those things where it could be used for good or for evil. The devil lurks in the details. But the concept of clearer pricing for this particular commodity has merit. SDG&E could lower its costs of procuring electricity rather dramatically if it were able to reduce its summer peak demand.

2. The rates, as proposed, are very confusing. If a customer can't understand the price signals, then they can't respond intelligently. This is one of those initiatives that has to be constructed so that the customer embraces it, rather than being inflicted upon customers.

3. SDG&E's request for $118 million -- largely driven by the need to "educate the public" is excessive. If their rate weren't so needlessly complicated, they wouldn't need so much money for education.

4. The prices have to be sufficient to give real economic incentive to customers to change their usage. As offered by SDG&E, the benefits are negligible and unlikely to result in the desired outcome. Customers will not make an effort to change their energy consumption for an additional $1 or $2 per month.  According to the North County Times story, a typical family, washing 400 loads of laundry a year, will save about $5 a month or about 15¢ a load by doing their laundry on the weekends. For many of us, the savings may not be worth the time spent doing our laundry on the weekends.  So yes, if you want to save 15 cents on a load of laundry, you'll be able to do it under the new proposal, but given the potentially enormous profits that SDG&E will make by your willingness to save 15 cents, it makes the utility seem miserly.

5. This new rate has to be designed so as to protect against punishing customers who simply can't change their consumption pattern. Homebound, inner-county residents don't deserve to be pummeled by this new rate scheme. A lot of people in San Diego made decisions about where to live, where to work, and what their houses should look like based upon the old rate scheme of averaged monthly billing. Imposing a new rate scheme with different rules could have a dramatic effect on some people's pocketbooks, and on their lives. We can't afford to have vulnerable customers dying or suffering profound health damage because they couldn't afford to run their A/C on a summer day.

Below is a table from SDG&E showing how much you'll save ... allegedly.  UCAN will be scrutinizing the facts behind this table.  Hearings are expected to be held early in 2011, so we'll let you know more as the case develops.