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 is this happening?
In January of this year, the Georgia Public Service Commission began allowing Georgia Power to “default” their 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.
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 be provided the dollar amount of the demand charge unless you calculate it yourself, which 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.
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. It’s very difficult for customers to manage their appliances that turn off and on automatically like a refrigerator.
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. However, the Smart Usage demand charge fee is not associated with peak. You pay for the maximum demand you used that bill period regardless of when it occurred.
It widely known from research, as well as other state’s experiences, that consumers do not want or understand demand charge rate plans. The risk of consumer backlash is very high. Georgia Power flew an expert witness in from California, Dr. Ahmad Faruqui, who spoke eloquently about how to eliminate this risk. You implement it for consumers moving into new construction who have no history with the utility’s rate plans:
“…it's a question of adjusting to a new house, new furniture, new air conditioning and so it comes with a different rate.”
Those unknowing consumers are enrolled on the demand charge rate plan, paying the hidden demand charge fee and have no idea because it’s nowhere on their bill and they have no history to compare it to since this is a new house or apartment.
Although the plan has been around since 2014, it was voluntary and few people enrolled. Now that it has been changed to a default rate plan for newly constructed premises in 2021, what impact will this demand charge have on people living in small apartments? People experiencing energy poverty? Will people understand they can say “no” when they call for new service? Do people understand they must avoid using multiple appliances at once to avoid a large demand charge fee, which may occur anyway for appliances outside of their control? There is no answer to any of those questions because no study was done.
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.