- A Powerpoint presentation obtained from Edison Electric Institute (EEI) suggests utilities call demand charges "efficiency rates" as part of the trade group's ongoing "Lexicon Project," which aims to revamp utility language to make it more palatable to consumers.
- Energy and Policy Institute, a liberal utility watchdog group, calls the potential switch "misleading," and part of the trade group's "misinformation effort." EEI has operated the Lexicon Project has since 2014, and could help the power sector redefine vital terms in state regulatory battles over rate design, clean energy and grid modernization.
- An EEI spokesperson said the demand charge rebranding — and the Lexicon Project as a whole — was not a scheme to mislead consumers, but part of the power sector's effort to "be clear and transparent with the people we serve."
From dubbing rooftop solar "private solar" to changing demand charges into "efficiency rates," electric utilities are trying to redefine key terms in the sector dictionary.
EEI, the trade group for investor-owned utilities, has spearheaded these efforts since 2014. Critics say its another attempt by the industry to rebrand controversial subjects in an effort to mask efforts that cost consumers money or limit access to energy technologies.
"Utilities face the conundrum that they are increasingly collecting less money from customers as people and businesses become more efficient in their use of electricity and begin adopting rooftop solar power," wrote David Pomerantz, director of the Energy and Policy Institute.
The push to change "demand charges" comes into a time when utilities are ramping up efforts to enact new rate design options for residential customers.
With a demand charge, customers are typically billed for their highest monthly energy usage over a short period, such as 15 minutes. The rate design is common for commercial and industrial customers, which have the biggest load profile.
Some utilities have also proposed demand charges on solar customers, but have faced hefty backlash. Small businesses and residential consumers typically do not have the equipment and software that bigger companies have to manage their energy usage, Pomerantz wrote.
Critics say demand charges would essentially negate any savings from net metering — a billing mechanism that credits rooftop solar users for excess energy sent to the grid. For the average non-solar consumer, Pomerantz said those charges would hinder efforts to reduce usage through energy efficiency and other advanced technologies.
EEI, however, says its push to revise power sector terms encompasses a broader effort to rid itself of jargon for consumers.
"We are constantly working to get rid of jargon and industry-speak, and replace it with language that is more customer-friendly," EEI spokesperson Jeff Ostermayer wrote to Utility Dive. "As we work to build an energy future that is smarter, cleaner, and stronger, we regularly engage with customers to learn how we can communicate about these efforts more effectively, and the language we are using is what customers have told us they prefer. That’s the idea behind this work.”
The same Powerpoint also suggests calling time-of-use rates "peak and off-peak" rates, which Pomerantz notes is a more accurate description of the rate design. Time-of-use supporters say they more accurately reflect system-wide usage and are easier for consumers to respond to than demand charges.