Understanding LADWP Electric Rates In 2024 | Solar.com

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Understanding LADWP Electric Rates In 2024

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.

Homeowners serviced by the Los Angeles Department of Water and Power (LADWP) have two residential rate schedules to choose from, with electric rates ranging from under 20 cents to 37 cents per kWh in 2024.

In this article, we’ll explore:

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.

LADWP Standard Residential Rates (R-1A) in 2024

The R-1A plan is a tiered rate schedule in which electricity charges vary based on your 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 climate control. But the more electricity you use, the more expensive it gets — especially in the summer.

R-1A rates are divided into three tiers with the cheapest electricity in Tier 1 and most expensive in Tier 3. In January-March 2024, rates range from 20 cents per kWh in Tier 1 to 26 cents per kWh in Tiers 2 and 3. These rates are roughly 5-6% higher than last year’s, as shown in the table below.

LADWP standard electric rate increases 2024

Rate Tier Jan-March 2023 (c/kWh) Jan-March 2024 (c/kWh) % increase
Tier 1 18.9 20.0 6.3%
Tier 2 24.7 25.9 4.8%
Tier 3 24.7 25.9 4.8%

Each tier has an allotted amount of electricity based on your temperature zone, shown 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.

Map of LADWP temperature zones for standard electric rates

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 January 2024. 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. Running it for 12 hours a day 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 were over 35 cents per kWh in the summer of 2023 and could reach 37 cents per kWh in 2024.

LADWP summer tiered rates

July-September 2023 (recorded) July-September 2024 (forecasted)
Tier 1 20.8 22.1
Tier 2 26.6 27.9
Tier 3 35.3 37.0

Forecast based on rate hikes consistent with those in effect for Jan-March 2024.

LADWP summer tiered rates 2024

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’s Time-of-Use Residential Rate (R-1B) in 2024

In January-March 2024, LADWP TOU rates range from 20.6 cents per kWh during base hours to 22.9 cents per kWh during peak hours. These rates are up 6.1% and 5.5%, respectively, from the same period 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 the TOU rate schedule is divided into three periods, as 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

For homeowners, the value of TOU rates is the opportunity to save money by shifting some of their usage from High Peak hours to Base and Low Peak hours. This load shift from peak to off-peak periods helps grid operators — like LADWP — maintain reliable service during high-demand events, namely heat waves when everyone is running their AC at the same time.

LADWP Winter TOU rates

In non-summer months (October-May), Low and High Peak rates are typically the same and vary only a few cents from Base rates. During these months, there are typically fewer high-demand events and, therefore, less incentive for homeowners to shift their electricity consumption away from Peak periods.

LADWP winter TOU rates 2024

LADWP summer TOU rates

In the summer, the difference between Base, Low Peak, and High Peak TOU rates gets more extreme, creating a greater opportunity for savings and a greater risk of high electricity bills.

In 2023, summer TOU rates ranged from 21 to 29 cents per kWh. Based on the rate increases already in effect for TOU winter rates, we’re forecasting 2024 summer rates to range from 22 to 31 cents per kWh — a 9-cent difference between Base and High Peak rates.

Nine cents may not seem like much, but it adds up over thousands of kilowatt-hours in a bi-monthly billing cycle.

For example, if running an air conditioner for 4 hours uses 13 kWhs, then shifting those 13 kWhs of usage from High Peak to Base hours during the summer can save $1.17 per day and over $70 per bi-monthly billing cycle.

TOU Period Electricity rate ($/kWh) Cost of 4 hours of AC (13 kWh)
Base $0.22 $2.86
Low Peak $0.25 $3.25
High Peak $0.31 $4.03

Based on forecasted summer TOU rates for 2024. Subject to change.

Of course, it’s not typically possible to shift all of your consumption to Base hours. But, given that LADWP’s Base Period includes nights and all day Saturday and Sunday, it’s easier to shift things like laundry, pool pumps, and EV charging.

LADWP TOU electric rate increases 2024

Based on the rate hikes already established for Jan-March 2024, we’re expecting summer High Peak TOU rates to increase by nearly 2 cents per kWh in 2024.

LADWP summer TOU rates 2024

Two cents per kWh may not sound like much, but it amounts to around 5.5% in a single year – nearly double 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.

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 EV charging rates

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 rates and home solar

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.



LADWP electric rate increase history

As with all utilities – public or private – electricity rates tend to go up over time, and LADWP is no exception. The big question is how fast are rates rising?

From 2019 to 2024, LADWPs tiered rates increased by ~3.7% per year, on average, which is slightly faster than the national average of 3% per year.

LADWP tiered rate increase history 2019-2024

With the rate increases since 2019, a Zone 1 customer using 500 kWh per month (thus avoiding Tier 2 & 3 charges) has seen their bi-monthly bill increase by $32 – that’s $192 more per year than they paid just 5 years ago.

LADWP TOUs rates have also been on a steady upward march, with base rates increasing ~4% per year and Peak rates increasing closer to 6% per year — around double the national average.

LADWP TOU rate increase history 2019-2024 v2

From 2019-2024, a TOU customer using 700 kWh per month split evenly between Base and Peak rates has seen their bi-monthly bill increase by $63. That’s $380 more per year in electricity costs than 5 years ago.

Lower your electricity costs with home solar

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.

Connect with an Energy Advisor to see how far you can reduce your electricity costs with home solar.



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 increased 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. These rates are expected to increase by around 6% in 2024.

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 January-March 2024, the cost of Tier 1 electricity is 20.0 cents per kWh while the cost of Tier 2 electricity is 25.9 cents per kWh. These rates change throughout the season and peak in the summer months of July-September.

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 are 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 January 2024, LADWP charges between 20 and 25.9 cents per kWh of electricity, depending on your rate schedule. Electricity rates typically increase in the summer, with High Peak rates in the time-of-use plan expected to surpass 31 cents per kWh in July-September 2024.

For reference, the average utility rate in the US is around 17 cents per kWh.


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