Understanding LADWP Electric Rates in 2023
With electricity prices on the rise and extreme weather events increasing the need for electricity, understanding how your electric rates work is crucial to lowering your electricity costs.
Customers of the Los Angeles Department of Water and Power (LADWP) have two residential rate schedules to choose from, with electric rates ranging from under 19 cents to over 35 cents per kWh.
In this article, we’ll explore:
- LADWP’s Standard rate plan
- LADWP’s Time-of-Use rate plan
- EV charging rates
- Net metering for solar customers
- The history of LADWP rate increases
- Frequently asked questions
Let’s start with the standard rate schedule and then see how time-of-use rates compare.
If you’re unhappy with your electricity bill, connect with an Energy Advisor to design a solar system to reduce your energy costs.
The R-1A plan is a tiered rate schedule in which electricity charges vary based on the customer’s consumption throughout the billing period. It’s important to note that LADWP bills on a bi-monthly basis, so each billing period is two months.
The idea behind tiered rates is that everyone is allotted a certain amount of electricity at a low price for essential needs like lighting, internet, refrigeration, and heating. But the more electricity you use, the more expensive it gets.
Rates are divided into three tiers. Electricity is cheapest in Tier 1 and most expensive in Tier 3. Each tier has an allotted amount of electricity based on your temperature zone, show in the map below. Zone 1 represents cooler coastal areas and therefore has less usage allotted for each tier. Zone 2 represents hotter inland areas and therefore has more usage allotted for each tier.
LADWP Rate Tiers (based on bi-monthly consumption)
|Zone 1||Zone 2|
|Tier 1||First 700 kWh||First 1,000 kWh|
|Tier 2||Next 1,400 kWh||Next 2,000 kWh|
|Tier 3||Above 2,100 kWh||Above 3,000 kWh|
Bi-monthly tiers as of August 2023. Subject to change.
The average daily electricity consumption in California is 18.1 kWh, which would be 1,086 kWh over a 60-day billing period. So, in a typical month, customers can expect to consume all of their Tier 1 electricity and dip into Tier 2.
However, consumption is typically much higher in the summer as warmer temperatures and heat waves increase the need for air conditioning.
A central AC unit typically consumes around 3.25 kilowatts per hour. If you run it for 12 hours a day that adds 39 kWh to your daily consumption and 2,340 kWh to your bi-monthly consumption. So, AC usage alone can put LADWP customers into Tier 3 rates, which can be over 35 cents per kWh in the summer, as show in the charts below.
LADWP tiered rates (Summer 2023)
|Tier 1||18.957 cents per kWh||20.782 cents per kWh|
|Tier 2||24.816 cents per kWh||26.641 cents per kWh|
|Tier 3||33.517 cents per kWh||35.342 cents per kWh|
Rates as posted by LADWP as of August 2023.
Under LADWP’s Standard Residential Rate schedule, the name of the game is simply to use as little electricity as possible to avoid buying it at Tier 2 and Tier 3 rates. But, for many people, this is easier said than done. Households with higher consumption and the ability to control when they use that electricity may benefit from LADWP’s Time-of-Use (TOU) rates.
LADWP TOU rates range from 19.1 to 29.5 cents per kWh in 2023. Unlike the standard rate schedule, TOU rates vary based on the time of day and the cost of generating and delivering electricity through the grid.
The R-1B plan comes with a $12 per month service charge and TOU rate schedule is divided intro three periods, shown below.
|TOU Period||Hours||Days of week|
|Base||8 pm to 9:59 am & all day Saturday and Sunday||Weekdays and Weekends|
|Low Peak||10 am to 12:59 pm & 5 pm to 7:59 pm||Weekdays|
|High Peak||1 pm to 4:59 pm||Weekdays|
The idea behind TOU rates is that customers with higher consumption can save money by shifting some of their usage to base and low peak hours. For example, drying a load of laundry uses 3 kWh, that would cost 63 cents during the Base Period instead of 89 cents during the High Peak period based on the 2023 summer TOU rates shown in the chart below.
Saving 26 cents on a load of laundry may not seem like much, but it adds up over a 60-day billing cycle. For example, if you use 1,250 kWh of electricity per month in the summer (2,500 kWh per billing cycle), shifting that consumption to the Base Period could save you nearly $215 per bill.
|TOU Period||Electricity rate ($/kWh)||Cost of 2,500 kWh|
Rates as of August 2023. Subject to change.
Of course, it’s not typically possible to shift all of your consumption to Base hours. But, given that LADWPS Base Period includes nights and all day Saturday and Sunday, it’s easier to shift things like laundry, pool pumps, and EV charging.
What is the cheapest time of day to use electricity at LADWP?
The cheapest time of day to use electricity for LADWP TOU customers is between 8 pm and 9 am during the weekdays and any time during the weekends. This is known as the Base Period, when electricity is 11-40% cheaper than the Low Peak and High Peak periods.
This is the ideal time to run large electricity loads like air conditioning, electric heat, and EV charging. In fact, LADWP offers a discount for customers who charge their EV during Base hours.
LADWP customers with EV chargers installed in their homes can receive a $0.025 rate discount for charging their EV during Base Period hours, according to LADWP. However, there are a few things to note about this discount:
- Your EV charger must be on a separate meter from your main meter
- The EV meter must be on a TOU rate
- There is a minimum monthly charge of $10 plus adjustment charges
So, in order to break even on the $10 monthly charge, you’d need to charge your EV with at least 400 kWh of electricity per month during base hours to break even. With an EV getting 3.5 miles per kWh, that means driving at least 47 miles per day (10 more miles per day than the national average).
So, if you have an especially long commute or a bunch of kids to chauffeur around, setting up a separate meter to get the EV charging discount can be worthwhile. However, if you don’t travel very far then you may want to go solar to reduce the cost of charging your EV.
LADWP offers net metering for customers who own solar systems (it does not apply to leases and power purchase agreements). Under net metering, solar owners are compensated at near-retail rates for the excess electricity their systems push onto the electricity grid during the day.
So, a home solar system designed to offset 100% of your electricity use can also offset up to 100% of your LADWP bill, aside from fixed basic charges.
According to LADWP’s website, “the customer shall be billed for the net energy supplied under the customer’s currently applicable rate,” which seems to imply that solar owners can use either rate plan (Standard or TOU).
This is a stark contrast to NEM 3.0 solar billing adopted by California’s investor-owned utilities (IOU) in April 2023, in which solar owners are compensated well below retail rates for their excess production. This makes it virtually impossible to achieve a 100% bill offset with a solar-only system, although it may be achieved by pairing solar with battery storage.
As with all utilities – public or private – electricity rates tend to go up over time, and LADWP is no exception. And rate hikes were especially steep during the pandemic years of 2020-2022.
In fact, from 2019 to 2023:
- The Tier 1 rate in the R-1A Standard Rate plan nearly tripled
- The Tier 2 rate more than doubled
- And the Tier 3 rate increased by more nearly 14 cents per kWh
With these rate increases, a Zone 1 customer using 500 kWh per month (thus avoiding Tier 2 & 3 charges) would see their bi-monthly summer bill increase by $138 in just four years – that’s $69 extra dollars per month.
LADWP TOUs rate also saw dramatic increases from 2019 to 2023 with the Base Rate nearly tripling and the Low and Peak rates nearly doubling.
Again, even if it was possible to keep all usage in the Base Period, a TOU customer using 750 kWh per month would see their bi-monthly bill increase by $204 from 2019 to 2023. That’s an extra $102 per summer month to scrape together.
LADWP electric increases 2023
LADWP rates increased by around 2.5 cents per kWh from 2022-2023 across all tiers and TOU periods in both residential rate schedules, as shown in the charts below.
LADWP standard electric rate increases 2023
LADWP TOU electric rate increases 2023
- For a customer low-usage customer using 500 kWh per month Standard Rate plan, that adds around $25 to each bi-monthly bill.
- For a high-usage customer using 1,000 kWh per month in the TOU rate plan, that adds around $50 to each bi-monthly bill.
Two and a half cents per kWh may not sound like much, but it amounts to around 10% in a single year – much higher than the national average increase of 3% per year. While it’s uncertain where LADWP electric rates will go in the future, rate forecasts for the investor-owned utilities in California show electricity charges increase by 6-10% per year through 2026.
Assuming LADWP is facing similar circumstances as SCE, PG&E, and SDG&E, it’s reasonable to expect rate hikes to continue in the coming years.
Electricity is an essential good and something most people are going to pay for one way or another throughout their lives. While LADWP offers relatively low electric rates and a TOU rate plan with High Peak pricing that’s easy to avoid, grid electricity is still incredibly expensive compared to home solar.
Better yet, as a public utility, LADWP still offers net metering to its customers instead of the less favorable NEM 3.0 solar billing policy adopted by the IOUs in April 2023.
What are the peak hours for LADWP electric rates?
High Peak hours in LADWP’s TOU rate plan are 1 pm to 4:59 pm, when electricity is around 40% higher than Base hours and 25% higher than Low Peak hours.
For example, in July-September 2023, electricity rates increase to 29.50 cents per kWh from 1 pm to 4 pm, compared to 23.66 cents for Low Peak periods and 20.91 cents during Base periods.
Fortunately, LADWP’s outdated High Peak window is rather early in the day, when many people are still at work or school.
What is the difference between Tier 1 and Tier 2 energy in LADWP?
The difference between Tier 1 and Tier 2 energy in LADWP is the cost per kWh for electricity. For example, in summer 2023, the cost of Tier 1 electricity was 20.78 cents per kWh while the cost of Tier 2 electricity is 26.64 cents per kWh.
The tiers are based on household electricity consumption and temperature zones. For example, if you live in Zone 1, your first 700 kWh per bi-monthly billing cycle is charged at Tier 1 rates and your next 1,400 kWh are charged at Tier 2 rates.
If you surpass your Tier 1 and Tier 2 allotments (2,100 kWh for Zone 1) you are then charged Tier 3 rates, which were over 35 cents per kWh in summer 2023.
How much does LADWP charge per kWh?
As of August 2023, LADWP charges between 18 and 35 cents per kWh of electricity, depending on month, rate schedule, and time of day. For reference, the average utility rate in the US, was 16.9 cents per kWh as of July 2023.
LADWP has a tiered rate plan in which electricity prices vary based on your monthly usage and a time-of-use rate plan in which electricity rates vary by the time of day.