SCE Time-Of-Use (TOU) Rates: A Beginner’s Guide
Time-Of-Use (TOU) plans are innovative pricing schemes that vary the cost of electricity based on the time of day. These plans are designed to reflect the changing costs of producing and delivering electricity as it fluctuates throughout the day.
As of August 2023, Southern California Edison (SCE) has three residential TOU rate plans in which electricity rates range from 23 cents per kWh during super off-peak windows in the winter to 74 cents per kWh during on-peak windows in the summer. With such a wide range, it’s important to understand SCE’s TOU rates in order to minimize your electricity bills.
In this article, we’ll explore:
- TOU versus tiered rate plans
- SCE TOU rate schedules
- TOU rates for solar and EV owners
- 2023 SCE rate increases
- Frequently asked questions
Most residential SCE customers can choose between a tiered rate plan and three TOU rate plans, which offer different pricing structures for electricity usage. With TOU plans, the cost varies based on the time of day, encouraging usage during off-peak hours. Conversely, tiered rate plans charge a constant rate until usage exceeds a certain threshold, after which a higher rate applies.
While TOU plans can save money for those who shift their usage to off-peak hours, tiered plans may be more beneficial for households with consistent energy use throughout the day.
SCE tiered rate plan
SCE’s tiered rate plan is relatively simple. As of June 1, 2023, electricity costs 33 cents per kWh until you reach your monthly baseline allocation limit, at which point the price increases to 42 cents per kWh for the remainder of the month.
2023 SCE tier rates
Your monthly baseline is based on where you live and can easily be determined by multiplying the daily allocation limit for your region (found here) by the number of days in the month.
For example, Anaheim falls into baseline region 8, where the daily kWh allocation is 12.8 in the summer. So, the monthly allocation in July would be 396.8 kWh.
The name of the game with a tiered rate plan is simple: Keep your total electricity consumption as low as possible to avoid paying Tier 2 and High Usage pricing (which are the same).
Related reading: Why Is My Electricity Bill So High?
SCE’s TOU rates can be a double-edged sword. If you are deliberate about your electricity usage, they provide an opportunity to lower your electricity costs from a tiered rate scheme. However, this can easily backfire if you use too much electricity during expensive on-peak hours.
There are three TOU rate plans that SCE customers can choose from:
Now, the names of these plans are a bit daunting, so let’s break them down a bit.
- TOU simply means time-of-use
- The “D” indicates that it’s a residential rate plan (rather than commercial)
- The numbers (4-9PM) indicate the on-peak pricing hours
- “PRIME” indicates a specific plan for customers with EVs, solar, batteries, heat pump HVAC systems, and other home electrification upgrades
Each plan has dedicated rates for summer and winter months, and for weekdays versus weekends. So, SCE’s TOU rates not only change by the time of day, but also by the season and time of the week.
Let’s take a look at each TOU rate plan to get a better sense of how they work.
TOU-D-4-9PM rate plan
As the name suggests, SCE’s TOU-D-4-9PM rate plan has an on-peak window of 4 pm to 9 pm. This plan comes with a minimal basic charge (3 cents per day). However, electricity rates can reach 59 cents per kWh during the on-peak window on summer weekdays.
The cheapest time of day to use electricity as an SCE customer is during the super off-peak hours between 8 am and 4 pm in the winter months (October to May).
This plan includes a baseline credit of 9 cents per kWh up to your monthly baseline allocation. That means you’ll be charged for the above baseline rates shown above, but you’ll receive an on-bill credit for 9 cents for each of your baseline kWh.
For example, if your baseline allocation is 350 kWh for the month, you’ll get an on-bill credit for $31.50 to reduce the cost of your monthly baseline allocation. Here’s what the TOU-D-4-9PM weekday rates look like after factoring in the baseline credit.
SCE TOU-D-4-9PM weekday rates (as of August 2023)
|TOU Weekday rates||Before baseline credit ($/kWh)||After baseline credit|
|Winter super off-peak||$0.36||$0.27|
Rates accurate as of August 2023 and are subject to change.
The advantage of SCE’s TOU rate plans is that the off-peak rates are lower than rates in the tiered pricing plan, both before and after you reach your baseline allocation. So, if you are careful about avoiding on-peak hours, you can pay less for electricity under a TOU rate plan.
If you can’t substantially decrease your electricity usage between 4-9 pm, then the 5-8PM plan offers an alternative that may be better suited for your consumption habits.
TOU-D-5-8PM rate plan
The 5-8 pm rate plan is similar in every way to the 4-9 pm rate plan described above, except for key differences in the on-peak and super off-peak rates.
Specifically, the on-peak window is two hours shorter but the summer weekday rate is 74 cents per kWh – 15 cents higher than the 4-9 pm plan. The idea is that this shorter window is easier to avoid, but much more costly if you end up using electricity between 5-8 pm.
The same logic applies to the winter rates, which are very high during on-peak hours and slightly lower than the 4-9 pm plan during the super off-peak hours of 8 am to 5 pm.
This plan is best suited for customers who can completely avoid the on-peak window of 5-8 pm. For example, if you work second shift or are typically out of the house from 5-8 pm, then it can be worthwhile to select this TOU rate plan.
The third SCE TOU rate plan, known as TOU-D-PRIME, is reserved specifically for customers with electrification upgrades like EV charging, solar panels, battery storage, and heat pump HVAC systems.
The main difference is that this plan comes with a 43-cent daily basic charge (~$13 in a 30-day month) and, in turn, has lower rates. TOU-PRIME does not have a baseline credit, so the charges are the same regardless of how much electricity is consumed throughout the month.
The theory behind this TOU plan is to lower the cost per kWh of electricity for households that have adopted clean energy upgrades.
For example, an EV getting 3.5 miles per kWh would use around 300 kWh per month to travel 37 miles per day (the national average miles per day). Charged solely during off-peak periods, it would cost $111 per month to charge at home in the summer (before the baseline credit).
However, on the TOU-D-PRIME plan, it would cost $78 to charge plus the basic charge of $13 for a total of $91 per month
SCE TOU rates for solar owners
Under the NEM 3.0 Solar Billing Plan adopted on April 15, 2023, new solar owners will be billed under TOU-D-PRIME rates.
Given the low export rates of NEM 3.0 solar billing, the PRIME schedule is the best SCE TOU plan for solar owners, as it provides the smallest difference between import and export rates.
As the chart above shows, the value of excess solar electricity pushed onto the grid (export rates) is ~75% lower, on average, than the import rates of electricity in the TOU-D-PRIME plan. So, it’s substantially more economical to pair a NEM 3.0 solar system with battery in order to store and use your own electricity instead of selling it for minimal credit.
On January 1, 2023, electric rates increased 7.21% for residential non-CARE SCE customers. This is the only increase of the year so far (as of August 2023), however, SCE has a habit of increasing residential electric rates in October and has done so every year since 2020, according to rate change advisories from the California Public Utilities Commission (CPUC).
SCE rate increases since 2020
|Month/Year||Rate increase (%)|
Data from the CPUC.
Future SCE rate increases
SCE customers can expect electricity rates to continue climbing at least through 2026. In the 2023 Senate Bill 695 Report, the nominal SCE rate was forecasted to increase from 28.8 cents per kWh in Q1 of 2023 to 35.3 cents per kWh by the end of 2026.
|Year||Nominal rate ($/kWh)||Annual increase (%)|
Data from the 2023 Senate Bill 695 Report
According to the report, that boils down to an average annual increase of 6% per year over the next three years – which is lower than the previous three years but still around double the national average annual utility rate increase.
It’s difficult to say exactly how upcoming SCE rate increases will impact TOU rates. Whether on-peak or off-peak rates increase more is anyone’s guess, but it’s likely that rates will increase at all hours of the day to some degree.
Meanwhile, it’s also important to consider the impact of income graduated fixed-charges that are expected to be implemented no earlier than the end of 2026. These new fixed charges are designed to lower the cost per kWh of electricity, just like the basic charge lowers rates for the TOU-D-PRIME rate plan.
Go solar to hedge against rising energy costs
Any way you slice it, electricity costs have increased dramatically in recent years for SCE customers, and are expected to continue rising at a substantial clip.
Solar and battery allow homeowners to drastically reduce the amount of electricity they are important and exporting from the grid, thereby replacing their utility bills with lower payments on their equipment.
Frequently asked questions
What are the peak hours for SCE?
Peak hours for SCE customers with time-of-use (TOU) rate plans are either 4-9 p.m. or 5-8 p.m., depending on their specific plan. Peak rates are highest in the TOU-D-5-8PM plan, in which on-peak rates reach 74 cents per kWh during summer weekdays. The TOU-D-4-9PM plan features a longer on-peak window, but a slightly lower summer weekday rate of 59 cents per kWh.
What is the best SCE rate plan for solar?
Under NEM 3.0 solar billing, the only rate plan available for solar owners is the TOU-D-PRIME schedule, which features lower electricity rates in exchange for a monthly charge around $12. Solar systems under NEM 2.0 and NEM 2.0 are best left under their current rate plan.
How much will SCE Rates be in 2024?
Based on the 2023 Senate Bill 695 Report, the nominal SCE rate is expected to increase 7.6% to 31 cents per kWh in 2024. This report also forecasted SCE rate hikes average 6% per year from 2026 to 2026, bringing the nominal rate up to 35.3 cents per kWh.
Nominal rate is a measurement of total revenue divided by units of electricity sold, and does not necessarily reflect the rate you’ll see on your bill. However, it’s clear that SCE rates will continue climbing through 2026.