Charging up for electrical-rate reform
Explains the peak-load pricing rate structure being considered by the Los Angeles Board of Water and Power Commissioners. By more accurately reflecting the cost of producing electricity, peak-load pricing would provide rate relief to the 700,000 residential customers, 125,000 small commercial and industrial users, and the more than 12,000 larger commercial customers. Higher rates would be charged to 750 of the largest consumers, about twice as much per KWH during peak hours as during off-peak hours. These 750 largest users would initially face electricity bills averaging 7.4 percent higher than current bills. In most cases, relatively modest changes in time of electricity use could reduce or eliminate the extra charges. Such shifts would permit the utility to burn less oil, thereby reducing its operating costs and creating less pollution. In the long run, the utility would reap savings because less variation in demand would permit less investment in growth of generating capacity.