Have you moved into a newly constructed home, apartment or condo this year? Congratulations! It feels great to move into a brand-new place with brand new floors, appliances, fixtures and lighting.
Here is something that won’t feel great: your electricity bills are likely to be 30-40% more expensive than you would be paying if you were on the traditional rate plan that 97% of Georgia Power residential customers have. Why are only Georgia Power customers moving to a newly constructed premises getting this plan?
In January of this year, the Georgia Public Service Commission began allowing Georgia Power to “default” customers moving into a newly constructed premises onto a rate plan they call “Smart Usage”, also known as a demand charge rate plan. “Default” means that you will automatically be enrolled onto the Smart Usage rate plan when you call for service. You can ask for a traditional rate plan, but few people will know to do that. “Demand” means the maximum amount of power you use over a one hour period during the bill cycle.
Your bill will say “Smart Usage.” See top of page 2.
And “Smart Usage” sounds good, doesn’t it? When something is called smart that mean it has digital features or is connected to the internet. People have a positive view of their smart phone, smart home, smart doorbell, etc., because of the features smart devices give them. But there is nothing “smart” about this rate plan.
Here is a list of what you will lose, or not have, on this “Smart” rate plan:
Your energy usage data in your online Ga. Power portal will disappear. Only people on the traditional rate plan can see their usage.
You will not know when the maximum demand occurred in your bill cycle. It is not on your bill and you cannot get it from the utility call center.
You will not know how much your demand charge was for your bill cycle because it is not on the bill. You could calculate it yourself, but it is based on a demand charge rate which is also not displayed on your bill.
There is no interactive online bill calculator, shadow billing, or any comparison tool to help you see the difference between the Smart Usage demand charge and the traditional rate plan.
You are not provided smart data like real time pricing, hourly usage, or any similar method to help you manage your demand charge.
There is no cap or bill protection for you on this rate plan even though the Georgia Public Service Commission has never allowed Georgia Power to default customers on it before.
You will not be allowed to unenroll from this plan for 12 months once enrolled.
Georgia Power, and Georgia Public Service Commissioners who authorized this rate plan like to say that customers could save money if they avoid using multiple appliances at the same time, but there are no studies that show that to be true. There are, however, plenty of studies that show such fees unfairly allocate grid costs to low-use customers in apartments and small homes.
But let’s pretend it’s true despite the lack of evidence: it is very difficult for customers to avoid using multiple appliances at once. How do you know what everyone else in the household is doing at all times? How do you manage appliances that turn off and on automatically like a refrigerator or hot water heater? If you had a smart home with smart devices and access to your hourly energy data it might be easy. But you don’t. No one does, because the Georgia Public Service Commission doesn’t require Georgia Power to provide such data.
Georgia Power and Georgia Public Service Commissioners like to say that this rate plan is good because it encourages customers to avoid using electricity at expensive times of the day, also known as “peak”, which can help reduce system costs. Peak energy usually occurs on the hottest afternoon of summer months and IS very expensive for the utility (and thus, us).
However, the Smart Usage demand charge fee is not associated with peak usage. You pay for the maximum demand you used that bill period regardless of when it occurred.
And anyway, the Georgia Public Service Commission does not have goals for Georgia Power to reduce residential peak demand, like most other states do. If there was such a goal there are more affordable rate plans and rebates where consumers save money by helping reduce expensive energy use, like this example:
And this one, both from other utilities:
It widely known from research that consumers do not want or understand demand charge rate plans. The risk of consumer backlash is high, based on what happened in other states. Georgia Power flew an expert witness in from California, Dr. Ahmad Faruqui, who spoke eloquently about how to eliminate this risk:
“…it’s a question of adjusting to a new house, new furniture, new air conditioning and so it comes with a different rate.”
Thus, unsuspecting consumers are enrolled on the demand charge rate plan called by another name and are paying the hidden demand charge fee. They have no idea because the fee is nowhere on their bill. And they have no history to compare it to since this is a new house or apartment. Their bills will be much higher than they would on a regular rate plan. And all of this is FINE with the Georgia Public Service Commission.
Go ahead – try to understand it: your demand charge fee is based on the maximum kWh usage you used over a one hour period during your bill cycle, multiplied by $7.96/kWh. But that fee is hidden from you. Thus, you are expected to modify your behavior to lower a fee you cannot see on your bill and you don’t know when it occurred.
Having seen how other state commissions carefully implement new rate plans, I am astounded that the Georgia Public Service Commission authorized such a drastic change with no study of customer impacts, nor required bill protections or even basic information to help consumers manage a rate plan in which they must make behavior changes to avoid a large bill.
Why did the Georgia Public Service Commission allow it? Georgia Power, and Georgia Public Service Commissioners like to say that they enjoy a “constructive regulatory compact” – complicated words to mean one thing: the Georgia Public Service Commission gives Georgia Power whatever it wants with little regard for protecting consumers.
Not In Georgia.
If you have discovered you are on the “Smart Usage,” demand a charge rate plan.
There are Several Things You Can Do.
Part 2 Coming Next