Understanding Time-of-use Rates

Dear Consumer Advisor,

I recently saw TURN Executive Director Mark Toney on TV warning about punishment pricing being instituted by PG&E.  I didn’t understand exactly when this would be started, or why, but I know I don’t want to be punished with higher bills.  Should I be worried?

Sincerely

Ann Xious

 

Dear Ann,

Mark was talking about time-of-use (TOU) rates, in which the price you pay for electricity varies according to the time of day. Higher prices are charged during peak hours and lower prices are charged during off peak hours. Rates are also typically higher in summer months than in winter months.

TURN’s analysis shows that large users will benefit the most from TOU rates, and customers who use less could end up paying more.  Despite TURN’s objections, the California Public Utilities Commission wants utilities to implement these rates statewide.

Pacific Gas & Electric, SDG&E and Edison will be moving all of their customers to TOU rates by 2020, so most people have nothing to worry about yet.  But if you are one of the customers chosen for upcoming “pilot projects,” your bill could be changing much sooner.  The good news is, thanks to TURN, you will have the option of opting out of time-of-use rates, or be able to recoup any overpayments if you choose to try the new rates.

Utility companies will select about 800,000 customers statewide to participate in TOU pilots in the next few months.  If chosen, consumers should receive clear, understandable notifications from their utility company that includes information on how to opt out for those who don’t want to participate in the pilot.  Each company has said customers chosen for the pilot will receive 3 separate notifications.

CONSUMER TIP:  If you are on medical baseline or CARE rates, you won’t be included in the pilot programs.

 You Can Opt-Out

If you are selected to participate in a time-of-use pilot program, and don’t want to, you have the option of opting out of the pilot and choose either the old, tiered rate system or a different rate, without any additional charges. 

You Can Try TOU Rates Risk Free!

Bill protections won by TURN can be taken advantage of for up to one year.   Your utility company should do a bill comparison and refund you the difference if, after 12 months, you’ve ended up paying higher bills under TOU than you would have under the old, tiered rates.  But it never hurts to be proactive and call and ask for the analysis.   Customers who opt out before 12 months will likewise be entitled to an analysis at that time and if entitled to refunds will receive them in the following month.

Is a time-of-use plan the best plan for me?

Customers who use very little electricity, or those who are mostly at home and using appliances or air conditioning during the peak hours of 4 p.m. to 9 p.m., may see higher bills, especially those in hotter climates. Those who are able to adjust their usage because they are not at home at that time, or have the flexibility to use some of the strategies below, might find these rates advantageous.

PG&E, Edison and SDG&E have rate plan comparison tools on their websites that consumers can utilize to compare their bills under both tiered and TOU plans.  If you have questions, customer service should be able to help.

Speak Out Now!

Remember, if you have complaints about hard-to-understand marketing materials, higher bills, confusing information, or inadequate customer service, you can let the California Public Utilities Commission know through filing a complaint at www.turn.org, or contact the Commission directly.  The CPUC has ordered utilities to switch the rates, and needs to hear about any problems customers experience during these pilots in order to improve the programs before switching all customers in 2020.  The good news is that when that does happen, the bill protections won by TURN will remain in place at least for the first year, and customers will always have the choice to opt-out.

 

WANT TO TRY TO SAVE WITH TOU?  You’ll need to avoid using electricity between the peak hours of 4-9 pm as much as possible.  Here are some strategies:

  • Turn on your air conditioners in the morning to pre-cool your house and switch them off later in the day.
  • Put your laptops, tablets and computers to sleep when not needed or run them on battery and charge overnight.
  • Run your washer, dryer, or dishwasher later in the evening, in the morning, or on weekends. A timer could be useful.
  • If you have an EV, charge it overnight.