California Public Utilities Commission Residential Rate Structure Rulemaking R Workshop Overview Time Variant Pricing (TVP) Workshop Gabe Petlin Analyst, Retail Rate Design Section Energy Division July 30-31, 2014

2 Time-Variant Pricing Workshop Objectives Day 1: Identify available factual data for the assessment of best practices and lessons learned in TVP rates in the areas of: rate design and program implementation load impacts (coincident and non-coincident) bill impacts (including low-income and mainstream customers) evaluation, measurement and verification (EMV) pilot programs, and the use of technology. Day 2: (a)Identify best practices & lessons learned from other TVP marketing, education & outreach (ME&O) programs; (b)Discuss California Investor Owned Utility (IOU) ME&O plans and identify any stakeholder concerns and gaps in the IOU proposals..

3 Defining Time-Variant Pricing AB 327 (Sec. 745a) defines “time-variant pricing” to include: Time-of-use (TOU) rates Critical peak pricing (CPP), and Real-time pricing (RTP) For purposes of this workshop, TOU will be the primary focus with consideration of CPP when appropriate. RTP is beyond the scope of this workshop.

4 AB 327 Rules on Time-Variant Pricing Allows, but does not require, default TOU rates beginning January 1, 2018 The Commission may authorize the utilities to offer optional TVP rates and other demand-response programs Allows residential customers to opt out of default TOU onto to a non-time-variant rate having at least two tiers. Requires consent from medical baseline and third-party notification customers before defaulting to TOU The Commission shall ensure that any TOU rate does not cause unreasonable hardship for senior citizens or economically vulnerable customers in hot climate zones Requires that customers receive one year of interval data before being placed on a default TOU rate and one year of bill protection thereafter. Requires that the utilities provide, yearly, a summary of available tariff options and expected annual bill impacts of each of these tariffs. The Commission shall strive for TOU rate schedules that utilize time periods that are appropriate for at least five years

5 R Proceeding Schedule February 2014 – IOUs Rate Design Proposals and Road Maps for Served March 2014 – Supplemental IOU Testimony Served April 2014 – Third Amended Scoping Ruling and ACR Issued May 2014 – Corrected Staff Proposal on Residential Rate Reform Served May and June 2014 – Additional Supplemental and Optional IOU Testimony Served June 2014 – Summer Rate Relief Settlement Proposals Approved by Commission July 2014 – TVP Workshop September 2014 – Intervener Testimony Served September & October 2014 – Public Participation Hearings October 2014 – Rebuttal Testimony Served November 2014 – Evidentiary Hearings December Opening and Reply Briefs March 2015 – Proposed Decision Issued Summer 2015 – If approved new rates to take effect