Tips to Minimize Your Electricity Bill With Time-Of-Use (TOU) Rates

Time-of-use (TOU) rates are available to all large California utility residential customers. Knowing how these rates work and how to maximize their Super Off-Peak usage rates is key to minimizing electricity bills. Here are some tips to navigate a TOU schedule.

What is the difference in cost between baseline allowance and TOU rates?

Rates schedules vary by utility. It’s typically easy to find schedule breakdowns on utility websites if you’re unsure of your current costs. Most traditional residential rate schedules offer a “baseline allowance” plan, also called a tiered rate plan. These plans offer the lowest price for usage within your “baseline allowance”. If you exceed that allowance, you pay a much higher rate for additional consumption.

I live in SDG&E territory. My 2018 billed rate was based on a tiered rate, where I was paying $0.27/kWh for my first 270 kWh of “baseline allowance” usage and to $0.48/kWh for usage exceeding baseline in the summer.

My current rate is a Time-of-Use electric vehicle plan, since I own an EV, with no baseline allowance. The rate has a $16 monthly fixed fee and I pay $0.09/kWh for Super Off-Peak energy from 12-6 AM on weekdays, $0.29/kWh for Off-Peak before 4 PM and after 9 PM, and $0.53/kWh On-Peak from 4-9 PM.

I have officially been on a residential Time-Of-Use rate for six months now, and just had my first bill from the cooling season. The chart below compares my July 2018 and July 2019 load profile.


July 2018 vs. July 2019 Load Profile

As you can see, my usage changed significantly during the Super Off-Peak where it increased, and On-Peak hours where it decreased.

How to optimize low off-peak rates

Thermal Storage

To minimize usage during the On-Peak rate, you can create your own thermal storage by pre-cooling your home before peak rates using a smart thermostat. For example, I set a schedule on my Ecobee thermostat to create a rudimentary thermal storage sequence. It changes my home AC setpoint from 75°F to 72°F at 3:30 PM. Then at the start of the On-Peak rates at 4 PM, my setpoint resets to 80°F. This hopefully allows me to float my home at a comfortable temperature until sundown, when I can open the doors to cool the house.

Utilizing Super Off-Peak Rates

Maximizing electricity use during the lowest rate tier is key. Since I have an EV, I currently charge my car almost exclusively before 6 AM, which accounts for the large usage before 6 AM. If you’d like to know more about how to charge your EV cost-effectively, check out this previous post.

Even if you don’t have an EV, you can still take advantage of the low off-peak TOU rates by using the delay or programmed start feature on high electricity use, discretionary items like your dishwasher or clothes dryer.

Bill Changes After Switching to TOU

Overall my July 2019 average energy cost was $0.23/kWh compared to $0.28/kWh for the same months last year. However, this is heavily weighted by a >30% increase in energy consumption due to the electric vehicle I purchased in October. Since I charge at night, when rates are cheapest, this pulls my average cost down significantly.

Keeping on Top of Rates

As utility rate schedules evolve, you’ll save money if you stay aware of billing options and minimize your overall usage and peak period usage, if you are on a TOU rate. There are many easy options to save energy in your home including smart thermostats, LED lighting and ENERGY STAR appliances. If you’re a commercial customer, read more about how to potentially save money on your bills with TOU rates here. If you’re a business and would like to know more about how to lower your energy bills and increase the sustainability of your operations, contact us anytime.

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