New Time-Of-Use Rates

Since January, SCE has been notifying customers in this first wave of transitions that they’ve been randomly selected to participate.

These customers will receive multiple communications before the actual transition in March. They will have the option to either remain on their current rate, transition to a specified Time-of-use rate or switch to a different Time-of-use rate offering.

The switch to time-of-use rates comes after the California Public Utilities Commission directed the state’s major utilities companies to default their customers to time-of-use plans by 2020.

The goal behind implementing the time-of-use plans is to lessen the strain on the electrical grid during its peak hours, when use of renewable energy is at its highest. This should help the grid adjust later in the day, when it switches to more conventional sources of power, such as natural gas.

While time-of-use plans can benefit some customers, many consumer advocates, like myself, warn it can raise rates for many others. Southern California Edison has rolled out six different time-of-use rate structures, each with their own purpose.

I’m going to go over one of the six time-of-use rate structures and show you the impact it has. The time-of-use rate structure that I selected to talk about is TOU-D-A this rate structure is intended for low and medium energy users.

Typical homeowners that use less than 700 kilowatt-hours a month. The average cost per kilowatt hour is 29 cents when you factor in the off peak rate.

In this diagram you can see the rates are at their cheapest when utility demand is at its lowest, 10PM to 8AM. With rates changing from 28 cents between 8AM and 2PM to 48 cents between 2PM and 8PM.

Comparing TOU-D-A to SCE’s Tiered Rate Plan you can see the dis-advantages of time-of-use. Most notably the average cost per kilowatt-hour.

The Tiered Rate Plan has an average cost per kilowatt-hour of 25.6 cents overall versus time-of-use average of 29 cents.

If you are someone who uses less than 700 kilowatt-hours a month in energy, and between the hours of 8AM to 10PM then this time of use plan will drastically effect your wallet as the average cost per kilowatt-hour during this time frame is 38 cents.

Here’s an example:

Lets say you used 700 kWh for the entire month of February, and during the month you used