What are time-of-use rates? Who do they work best for?
Working families across the country try to figure out how to make ends meet every day. San Isabel Electric Association’s Board of Directors understands this. The co-op is also facing continued cost pressures and is reviewing a variety of options to keep power affordable while continuing to provide you with excellent service. One option that could be considered is moving to a standard time-of-day (TOD) rate structure, where what you pay depends on when you use electricity.
SIEA currently offers two optional TOD rates that offer nearly half-price electricity during off-peak hours when demand on the grid is the lowest. Some members on a TOD rate can use the same amount of electricity and save money on their electric bill by simply changing when they use electricity. Most SIEA members are on the Classic Rate, or fixed rate plan, which charges the same price no matter when you use power.
These are our current options, and while they may change in the future either by going away or by expanding, right now they give members new ways to save.
Before enrolling in a TOD plan — which requires a one-year minimum commitment — make sure your household routines line up with off-peak hours.
HOW TOD WORKS
TOD rates are a lot like off-season travel or matinee movie tickets. The product is the same, but the price depends on timing. When electricity demand is high — like from 5 p.m. to 9 p.m. when families are at home cooking, cleaning, and heating or cooling their homes — it costs more to produce and deliver. When demand is low, it costs less.
WHO BENEFITS FROM TIME-OF-USE RATES?
- Members who can shift more than about three quarters of their usage to off-peak hours.
- People who can run appliances overnight, mornings, during the day, or on Sundays.
- Households that can avoid using their heating and air conditioning systems, and electric appliances between 5 p.m.–9 p.m.
- Owners of electric thermal storage heaters.
TOD rates can be beneficial to both the member and the co-op. When you use less electricity during peak hours, the co-op saves money, and those savings are passed on directly to you.
These rates aren’t for everyone, but for some, these rates can help save money over time.
OFF-PEAK PLUS RATE
SIEA’s Off-Peak Plus rate offers nearly half-price electricity for most of the day and all day on Sunday. But the on-peak rate costs more than double the regular fixed rate during the four on-peak hours, between 5 p.m. and 9 p.m., Monday–Saturday.
Members who can be flexible about when they use electricity or who can shift the majority of their electric use to off-peak hours are most likely to benefit from the Off-Peak Plus Rate.
