The State Corporation Commission (SCC) will hold a hearing Friday on a plan that would require Virginia's 9,000 largest residential electricity users to pay their electric bills on the basis of the time of the day they use the electricity.
The system is called "peak-load pricing," and Virginia Electric and Power Company (VEPCO) has applied to the SCC for permission to test it for one year, probably beginning in mid-1978.
The SCC hearing will begin at 10 a.m. at the Blanton Building, Bank and Governor streets, Richmond.
Under peak-load pricing, different rates are charged for electricity used at different times of the day. The idea is to induce customers to spread their demands for electric power through the course of a day.
Not only would spreading out demand cost the consumer less, but it would save the utility from having to construct new generating plants to meet ever-increasing peak demands.
VEPCO's plan is to send two bills to its 9,000 participants, 3,200 of whom live in northern Virginia and all of whom have been notified of the experiment.
The first bill would be computed as bills are now and would be the one the customer would pay. The second bill, which would be strictly advisory, would show the customer how much electricity he used at different hours and what it would cost under peak-load pricing system.
The information for the second bill would come from a special $200 meter that would replace meters now in place at the 9,000 affected homes.
After one year of experimentation, VEPCO proposes to move to the new system and bill the 9,000 customers on the basis of peak-load rates.
Under the VEPCO experiment, the "second bill" will have four components. They are:
A flat $11.30 montly customer charge.
A "kilowatt demand charge." It would be $4.65 per kilowatt from June to September and $1.65 per kilowatt the rest of the year.
An "energy charge" of 2.15 cents per kilowatt hour for electricity used between 10 a.m. and 10 p.m. on weekdays. The charge would drop to 1.5 cents per kilowatt hour during the other 12 hours of each weekday and on weekends.
A fuel adjustment charge computed the way it is on current bills.
In addition, to defray the cost of the special meters, VEPCO officials said they will charge each of the 9,000 customers involved in the experiment an additional $6 a month.
VEPCO officials said they expect complaints about that fee, especially since participants in the program were told to join, not asked.
But Bill Berry, senior vice-president for commercial operations, said VEPCO is "going to send a human being to sit down and talk with each of them" before the program begins "so they will understand where that money is going."
A family that now uses all of its electricity between 10 a.m. and 10 p.m. and does not change its habits under peak-load pricing could expect to pay about 50 per cent more for the same number of kilowatt hours, officials said.
A family that uses all of its electricity between 10 p.m. and 10 a.m. could expect to pay about 20 per cent less for the same number of kilowatt hours, officials said.
The 9,000 customers in the experiment represent all VEPCO residential customers who used more than 3,500 kilowatt hours of electricity in any one month last summer. VEPCO serves the central, eastern and northern parts of the state.
In addition to the 3,200 affected customers in northern Virginia, 3,065 are in the Tidewater area, 1,914 in the Richmond area and 470 in the Charlottesville area. The remainder is scattered around the state.
VEPCO estimates that its one-year experiment will cost $2.5 million, including about $1.8 million for meters. The money will come from the company's general operating funds, Berry said.
In addition to what VEPCO calls its 9,000 "mandatory" participants, 1,000 other VEPCO customers are eligible to volunteer to the billed immediately on the basis of peak-load pricing. Applications will be accepted if and when the SCC approves VEPCO"s experiment.
Berry said VEPCO eventually hopes to institute peak-load pricing for as many of its customers as would benefit from it.
For the small user, "the chance of his saving money is pretty slim," Berry said. But VEPCO estimates that homes averaging between 1,500 and 3,500 kilowatt hours of consumption a month could benefit. The average consumption per home in Northern Virginia is about 1,500 kilowatts a month.
Berry emphasized that the 9,000 customers targeted for the experiment will not "have to alter their life styles right away, and maybe not at all." But under VEPCO's proposal, peak-load pricing would become real, not experimental, after its one-year trial, "so it would be to their advantage to work with us to find ways to reduce their usage, and spread it out," Berry said.
The reason that "peak-load" electricity costs more than "off-peak" electricity is that a utility must spend millions to build generating capacity for peak periods. During periods of normal demand, that "peak load" capacity is idle.
In northern Virginia, peak loads typically arise in late afternoons of hot summer days, when air conditioning demand is heaviest.
In recent years, VEPCO and other Washington-area utilities have taken to "load shedding" to reduce such peaks. The utilities simply cut off power to certain areas for an hour or two when demand threatens to over-tax a system.
The most recent "load shedding" episode in Virginia occurred on Jan. 17, 1977, one of the coldest days of last winter. Customers around the state had their electricity cut off for as much as 2 1/2 hours. More than 350,000 Virginians were affected.