If you like to crank up your air conditioner or dishwasher in the evening, think twice. It’s about to cost you more on your electricity bill.
SMUD, which provides electricity to more than a half-million residences in Sacramento County, has begun notifying some customers.
The rate overhaul will phase in groups of residential customers between October and April, officials said. Some customers with rooftop solar panels have been on the time-of-day system since earlier this year.
SMUD is among several major utilities in the state switching to rate systems that encourage customers to reduce energy use when peak demand strains the providers’ ability to buy and deliver electricity.
SMUD and other utilities must pay premium prices for energy they buy during peak hours, which in turn forces higher customer rates, utility officials said. Some of that peak-hour energy is drawn from older plants that are not as environmentally efficient.
“With the demand and the price increases, it becomes difficult for utilities to keep sending (electricity at) a fair price to the customer,” said Alcides Hernandez, SMUD pricing supervisor. “The intent is that SMUD is not going to make any extra revenue from this.”
The new rate system “gives customers the power to manage their bill. The decisions is theirs,” Hernandez said.
SMUD officials say they believe most customers will see a decrease in their electricity bills during between October and May, but an increase from June to September.
While SMUD hopes to reduce costs and hold down rates overall, some users will see their annual electricity rates go up if they do not control electricity usage between 5 and 8 p.m. That is typically when people come home from work and turn up the air conditioning, as well as use kitchen appliances, televisions, washing machines and dryers.
A SMUD analysis suggests that 57 percent of customers would experience a monthly bill increase if they do not change their usage patterns.
The SMUD plan involves setting up three different rate periods on summer weekdays. That summer-rate season will be four months long, from the beginning of June to the end of September.
The current fixed rates are 13 cents per kilowatt hour in summer and 11 cents the rest of the year.
The new summer rates will be dramatically higher. There will be a “peak rate” of 28 cents per kilowatt hour between 5 and 8 p.m. and a “mid-peak” rate of 16 cents between noon and 5 p.m. as well as between 8 p.m. and midnight.
SMUD will charge its lowest summer rate, 12 cents per kilowatt hour, between midnight and noon. SMUD will also charge that rate all day on weekends and holidays.
The utility will implement a simpler rate system for the rest of the year, from October through May. It involves two weekday rate periods – 13 cents per kilowatt hour between 5 p.m. and 8 p.m. and 10 cents the rest of the day.
In household usage terms, according to SMUD, a kilowatt hour could be 10 hours of TV, 12 pounds of laundry, vacuuming for one hour or using a plugged-in laptop computer for five to 10 hours.
A statewide customer advocacy group says switching to time-based rates does not necessarily prompt lower usage or energy conservation, and it could penalize some families who are not in a position to change their use hours.
“We think customers should be rewarded with tiered rates based on how much you use, not when you use it,” said Mindy Spatt, spokeswoman for TURN, The Utility Reform Network. “With time-based rates, they are rewarded if they are in the enviable position of being able to shift their usage. If you work during the day, you can’t do that.”
SMUD officials say they are offering customers the ability to opt out of the time-of-day system and stick with a fixed-rate bill. Hernandez said, on the average, the fixed-rate bill is expected to be about 4 percent more costly than the new rates. He said the utility is mailing information to people showing them the possible different costs of the two systems.
The new rate structure will not apply to customers who don’t have a smart meter or those who live in a residential master metered community.
SMUD customers can review their electricity usage on the SMUD website at www.smud.org/MyEnergyTools