Peak periods are also seasonal, but can be greatly affected by local weather conditions.
Unless we move to a system where electricity is priced in real-time dollars, which would be enormously difficult to do, about the only thing the PUC could do to implement your suggestion is to arbitrarily dictate some times of the day during some times of the year as peak periods, whether they really are or not, and set a higher price for kilowatts used during those periods. Heavy users would then have to decide whether or not to shut down during those periods or incur additional costs.
However, I do agree that the overall solution is deregulate the supply of power within California. Even the industry insiders who have benefited from squeezing out competition have found the barriers to constructing new plants too high. Unless that changes, California will have chronic power shortages.
...about the only thing the PUC could do to implement your suggestion is to arbitrarily dictate some times of the day during some times of the year as peak periods, whether they really are or not, and set a higher price for kilowatts used during those periods. Heavy users would then have to decide whether or not to shut down during those periods or incur additional costs.
Weather in California is fairly predictable on a seasonal basis, at least enough so that it would be worth implementing what you suggest (which is closely akin to what I was thinking). Given that in the short term, the markup on that power would be regulated, the "hourly price" could be a simple multiple of what was paid or a differential percentage negotiated with the PUC. Either way, the user would have the incentive to install equipment that would reduce peak demand. That's the key.