Time of Use Energy Charges Go into Effect (for Some)
Did you recently receive a notice in the mail from Southern California Edison that looks something like this?
You are not alone! Edison is transitioning approximately 400,000 residential customers to Time-of-Use (TOU) rate plans starting March 1, the single largest transition of residential customers to TOU rates anywhere in the nation.
The most important thing to note is that TOU rates are NOT mandatory and you have an option to remain on your current plan or switch to one of five different TOU rate plans offered by SCE.
However, note that TO STAY ON YOUR CURRENT PLAN YOU WILL HAVE TO TAKE ACTION by the date on your notice (MARCH 1ST here). If you do not, SCE will switch you to either the new TOU-D-4-9PM or the TOU-D-5-8PM plan, but with one year of bill protection so that if your new bill is more than your bill would have been with your current rate, then SCE will reimburse you the difference for one year.
If you do switch (or get switched) to a TOU plan, you can always switch back to your current plan at any time. There is no minimum commitment period. If you go with the TOU plan that Edison switches you to you’ll receive Bill Protection for the time you stayed on their new rate plan.
So, what’s this all about?
At the moment, residents pay for electricity based only on the amount (kilowatt-hours, kWh) used. In Thousand Oaks a rate of $0.17 per kWh applies to the first 13.8 kWh used each day in summer and the first 10.6 kWh used per day in winter. After this “baseline” amount, the rate goes up (“Tier 2”) to $0.25/kWh.
TOU rates charge for electricity based primarily on the time of day that the electricity is used. This is being done to try to better align supply and demand for electricity. Some times of the day there is more electricity available on the grid than there is demand for that power, whereas at other times there is a shortage of available power. When there is more supply than demand, wind turbines may have to be turned off and left idle or we may even have to pay Arizona (or others) to take power off the grid before lines get overloaded. When there is a more demand than supply, additional generating facilities have to be fired up instantly.
The California Public Utilities Commission believes that the best way to tackle this issue is by structuring rates to incentivize energy use in times of low demand (“off-peak” hours) and disincentivize use in times of high demand (“on-peak” hours) and has instructed SCE to begin implementing TOU rates for residents. (Commercial and industrial customers are already on TOU rates.)
How do I know what’s best for me?
You can get more information about the different TOU rate plans at www.sce.com/toutransition. This webpage provides several useful links including a rate comparison tool which will compare your costs under the different rate schedules, and a breakdown of all the TOU rate plans.
The good news is that if you are able to shift the time of your energy use, you could save money. For example, running a pool pump overnight can be done for as little as $0.04/kWh under some plans (up to the baseline allowance), or charging an electric vehicle at night can be done for $0.13/kWh with the new TOU-EV-1 rate. If you typically use a lot of energy between the peak hours of 5 and 8 pm, take note – the rates will be much higher at those times than now - you may want to “pre-cool” your house before you get home from work in summer to avoid those $0.49/kWh summer weekday rates on the TOU-D-5-8PM plan. And whenever you can shift your energy use to earlier in the day, not only will you save $$ but you will also be helping the environment by using more clean renewable energy.