Did you receive something lately in the mail from SoCal Edison about “Time of Use” billing?
Southern California Edison has notified millions of customers in advance of this change. Eventually their entire customer base will get these notices. They’ll take customers off the traditional tiered structure, based on how much electricity they use in one month. Folks will now get Time of Use (TOU) billing, where the price of electricity changes based on the time of day.
In many areas, this is already in effect. Are you on TOU billing? Do you know whether you are or not?
Many homeowners don’t know, because they don’t pay much attention to their electric bills.
Many homeowners received the notice but ignored it, because they believed that it wouldn’t change much.
The truth is, it can raise your monthly bills significantly.
If you are a Southern California Edison (SCE) customer and haven’t looked into it yet, it’s as good a time as any. They’ve provided information for customers here.
But their page is not super clear or easy to understand.
Don’t worry – we’ll help break it down for you. Read on…
What Exactly Does “Time of Use” Mean?
Before the change, SCE charged customers on a tiered plan. The plan billed based on how much electricity your household used in a month. If you used very little and didn’t exceed your allotted amount, you paid lowest rate, Tier 1. The lower the tier, the less you’d pay per kilowatt-hour of electricity.
If you went over your allotment, you’d get bumped up a tier, to Tier 2. If you went past the Tier 2 allotment, you’d be moved up to “high usage” (aka Tier 3).
And with each tier up, for the rest of the month, you’d be charged more for the electricity you used. But it wouldn’t affect the billing up until that point. So if you used very little in a month and kept within the tier 1 amount for the first 25 days, then for those 25 days you’d be charged a small rate. You’d only pay the higher rate the last few days of the month.
This was great for households who used very little electricity, and predictably comfortable for households who used more electricity.
With Time of Use structuring, however, how much you pay for electricity depends on what time of day you use electricity – every day, all month long.
Most customers will be put onto a plan with peak pricing during the hours of 4-9 PM. Some will have peak pricing from 5-8 PM; since this is a shorter window, they’ll pay more per kilowatt-hour.
Put simply, the pricing looks like this…
For Summer hours, electricity costs:
- From 8 AM to 4 PM, 22 cents per kilowatt-hour.
- From 4 PM to 9 PM, 40 cents per kilowatt-hour (peak pricing).
- From 9 PM to 8 AM, 22 cents per kilowatt-hour.
That’s nearly double the cost of kWh during the hours when most people use the most electricity.
Of course, there will be differences in the hours and prices based on location. But as of March 1, 2019, this is the default structure for summer months.
Why Make This Change?
SoCal Edison claims it’s so they can use a more environmentally-friendly service, using more wind and solar energy when they are naturally available.
As a top California solar company, we can certainly appreciate the sentiment.
But at the end of the day, SCE customers may be paying a lot more out of their own pocket, and that won’t bring many smiles to many faces.
How Does This Affect You?
Again: previously, SCE would allot a certain quantity of electricity to each home. Their pricing was on a tiered structure. They’d bill customers according to how many kilowatt-hours of electricity they used.
But now, households who still use relatively small amounts of electricity each month could potentially see bills more than twice as high as they used to pay.
With the new Time of Use structure, every household pays the highest prices every single day during the hours when most people use the most electricity.
If you work normal business hours and come home late in the afternoon or early in the evening, you probably use most of your electricity right in those peak pricing hours. If you were one of those customers who paid smaller prices for most of the month on the tiered structure, then you stand to see significant increases in your electric bill this year.
In short: SCE stands to make a lot more money, and homeowners will be paying a lot more money.
How Can You Avoid Paying More?
SCE will roll out this new structure to all its customers over the coming months. Many homes have already been on this structure for some time. SCE has already transitioned 2 million of their 14 million clients over to TOU.
The best thing you can do to avoid increases in your bill is to switch to solar power. When you generate your own electricity all day every day, you pay a lot less to the utility company. You’ll also be playing your own part to reduce strain on the electrical grid and reduce your carbon footprint.
Horizon Solar Power makes switching to solar power at home really, really simple. There’s a lot of paperwork involved, and we’ll do it all for you. We’ll custom design your solar system so that you’re sure to pay less each month, not more. Our installations aren’t outsourced to untrustworthy construction crews; we take care of everything in-house.
Even if you’re not on SCE’s Time of Use structure yet, you will be in the near future. There’s no reason to wait to go solar.