Time-of-Use Plans help Tame High Monthly Bills
Sacramento, CA- Looking for a simple way to lower your monthly electric bill? By shifting the time of your electricity use, you may be able to help reduce your expenses with Time-of-Use rate plans.
The California Public Utilities Commission explains how Time-of-use (TOU) plans work and how they can reduce overall costs.
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Time-of-use is a rate plan in which rates vary according to the time of day, season, and day type (weekday or weekend/holiday). Higher rates are charged during the peak demand hours and lower rates during off-peak (low) demand hours. Rates are also typically higher in summer months than in winter months.
This rate structure provides price signals to energy users to shift energy use from peak hours to off-peak hours. The chart below shows the pricing for an illustrative time-of-use rate plan. Red indicates high price periods, yellow indicates moderate price periods, and green indicates low price periods.
Time of use pricing encourages the most efficient use of the system and can reduce the overall costs for both the utility and customers.
Prices are predetermined for each time period. Prices do not adjust according to day-to-day changes on the wholesale electricity market.
Currently, all commercial, industrial and agricultural customers in California are required to be on a time-of-use plan. Residential customers can choose to be on to time of use plans, by contacting their utility.
If customers have energy usage that can be shifted from peak hours to off-peak hours, they may be able to reduce their energy bill by switching to a time-of-use rate plan. For example, customers could run large appliances like dishwashers and washing machines at off-peak hours. Electric vehicle owners may also benefit from switching to a time-of-use rate plan if they charge their vehicles overnight.
PG&E – Pacific Gas & Electric
SCE – Southern California Edison
SDGE – San Diego Gas & Electric