Time – of – Use

Time-of-Use

Time-of-Use or TOU refers to rate plans that break the day into a series of hourly periods like peak, off-peak, part-peak, etc. The rate for electricity changes depending upon the time period when the electricity is used.

The California Public Utilities Commission (CPUC) directed TOU rates be established to use price incentives to shift electricity use away from the 4 pm to 9 pm period when energy costs are high and demand for electricity spikes.

During the day, energy costs are lower because solar power is more plentiful, but around 4 pm, solar production drops and demand for electricity rises.

Residential TOU

Time-of-Use rate plans are based on how much energy a customer uses and when the customer uses it. TOU rate plans have been available to customers for years. However, in an effort to better match electricity usage with the current renewable energy market, the CPUC ordered that all residential customers be transitioned to the default TOU-C rate unless they choose differently. Pioneer customers are scheduled to transition in February 2022.

Transition onto TOU-C is automatic, unless customers choose a different TOU rate or tell PG&E they decline to transition. The Pioneer Board did vote to not have customers enrolled automatically – but this only applies to the generation component of the TOU rate. Customers will still need to make a choice regarding whether they would like to decline transition to a TOU rate it relates to the transmission and distribution component.

How TOU Rates Work

TOU-C has peak pricing from 4 pm to 9 pm every day (including weekends and holidays). The price changes based on the time of day:

  • Peak (higher price) – 4 p.m. to 9 p.m. every day
  • Off-Peak (lower price) – before 4 p.m. and after 9 p.m. every day
  • This rate includes a baseline allowance and a tier for usage above that allowance

Customers can save money if they can reduce their energy usage overall and especially during the higher-priced (peak) hours. For customers who would like to try the TOU-C rate, Pioneer offers bill protection.

TOU-D has a peak price from 5 pm to 8 pm on weekdays. This rate plan offers lower prices during periods of the day when energy costs are lower—before 5 p.m. and after 8 p.m. on weekdays and during all hours on weekends and most holidays.

The price customers pay changes based on the time of day, the day of the week, and the season. The schedule looks like this:

  • Peak (highest price) – 5 p.m. to 8 p.m. Monday through Friday (except most holidays)
  • Off-Peak (lowest price) – before 5 p.m. to 8 p.m. Monday through Friday and all hours on weekends and most holidays
  • Eight months (October through May) have lower prices than the four months of summer (June through September)
  • Unlike the Time-of-Use Rate Plan 4-9 p.m., there is no Baseline Allowance on TOU-D

PG&E indicates that TOU-D may be more attractive for higher energy users because the price of electricity is lower than TOU-C if customers’ monthly electricity usage exceeds the Tier 1 amount (Baseline Allowance).

Customers interested in seeing if they can save money on a TOU or other rate plan should conduct a rate analysis https://www.pge.com/en_US/residential/rate-plans/how-rates-work/find-my-best-rate-plan.page.

Special note for Net Energy Metering (NEM) customers: Transition for NEM customers began with customers who had true ups in April, including Pioneer NEM customers. This transition will continue through March of 2022. NEM customers receive notices from PG&E 90, 60 and 30 days before transition. The notices include a rate comparison, business reply card, and instructions about when and how the transition will occur. Pioneer NEM customers are advised to watch for these notices and make a rate plan choice.

In addition, PG&E conducts “high impact” analysis. For NEM customers who will be highly negatively affected by a transition to a TOU rate, PG&E will call to ensure the customers are aware of the pending transition.

Pioneer Notified Customers of Possible Savings

With all TOU rates, customers have the opportunity to save money if they can reduce their energy usage overall and especially during the higher-priced (peak) hours.

Pioneer requested an analysis of its TOU transition eligible residential customers. The analysis showed 11,500 customers could benefit by being on a TOU rate.

Because customers have the option to enroll on TOU rates at any time, Pioneer has already sent letters to the 11,500 residential customers letting them know about the possible savings and the availability of bill protection.

Non-Residential Time of Use

The CPUC’s directive on TOU affected commercial, industrial and agricultural (non-residential or CIA) customers as well. PG&E reconfigured the original A rate tariffs into “B rates,” which included adjustments to peak hours, peak seasons, and other changes. The CPUC made the transition from A rates to B rates mandatory for CIA customers. The transition began in March of 2021 with most customers transitioned by April 2021. A second transition phase is slated for November 2021 to address residual customers.

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