{"id":5909,"date":"2016-08-19T12:50:30","date_gmt":"2016-08-19T12:50:30","guid":{"rendered":"https:\/\/www.portal.solar.com\/learn\/time-of-use-rate-impact-on-residential-electricity-costs-a-southern-california-edison-customer-case-study\/"},"modified":"2019-11-13T23:14:05","modified_gmt":"2019-11-13T23:14:05","slug":"time-of-use-rate-impact-on-residential-electricity-costs-a-southern-california-edison-customer-case-study","status":"publish","type":"post","link":"https:\/\/www.solar.com\/learn\/time-of-use-rate-impact-on-residential-electricity-costs-a-southern-california-edison-customer-case-study\/","title":{"rendered":"Time of Use Rate Impact on Residential Electricity Costs: A Southern California Edison Customer Case Study"},"content":{"rendered":"

Southern California Edison (SCE), one of California\u2019s three biggest investor-owned utilities, has created optional Time of Use rate schedules for residential customers. The new schedules mark a significant change in how customers are billed for the energy they use: <\/span><\/p>\n

Instead of a flat rate charged around the clock, customers are charged more for using more energy during times when overall electricity demand is highest, charged less when demand is lowest, and the base rate changes seasonally as well. Time of Use rates allow utilities to better recoup the costs of generation and allow their customers to save money through smarter management of energy use. In this case study, we analyze the effect that Time of Use (TOU) rates have on the overall cost of electricity for customers currently on a standard tiered residential rate structure. <\/span><\/p>\n

SCE\u2019s new residential TOU structure includes three time periods: On-Peak, Off-Peak and Super Off-Peak. On-Peak refers to the daytime hours when the demand is highest for electricity from different consumers. This time period has the highest electricity prices, since generating facilities have to switch on more units to satisfy demand. In the mid-mornings and at night, energy demand drops, and this is the Off-Peak period. During the late-night hours, demand from residential consumers particularly significantly decreases, and thus the time is known as Super Off-Peak hours. <\/span><\/p>\n

The TOU rate structure is designed so that the cost of electricity is highest during on-peak hours in the late afternoon and early evening and lowest during Off-Peak hours at night and in the early morning. It encourages consumers to use more energy during early mornings, late evenings, nights and weekends. Time of Use time periods and rates are different for different utilities and typically do not change more than twice a year; in the summer and winter.<\/span><\/p>\n

To demonstrate how a TOU rate schedule would affect residential consumers, we will use the case of a residential consumer, \u201cBob Musselman,\u201d to compare the energy consumption and electricity bill without implementing the TOU rates \u2013 in other words, under the standard residential rates serving most residential customers \u2013\u00a0and with implementing TOU rates. For the case study we analyzed Bob\u2019s energy consumption data from February 2014 to February 2015.<\/span><\/p>\n

Baseline regions are defined by the California Public Utilities Commission (CPUC), which says that every consumer receives a preset amount of energy depending on location, season of the year, and whether a consumer\u2019s household is fully or partially electrified. Therefore, a consumer dependent solely on electricity would have a higher baseline. The majority of customers currently are under the standard residential tiered rate structure. Tiered rate structures charge higher rates for energy use that exceeds the baseline. The tier (or level) following it would be priced even higher. The daily kilowatt-hour (kWh) allocation for the baseline tier differs by location. Check this video to know more about kilowatt-hour (kWh).<\/span><\/p>\n