SDGE Rate Increase 2019 Explained (Time Of Use Case Study)
Starting March 2019, everyone in San Diego will be transitioning to the TOU (time of use) schedule.
What Is TOU
TOU (Time Of Use) is a energy pricing plan where energy rates are based on the time in which energy is being consumed. Similar to booking a flight or hotel, prices fluctuate based on the date you are booking. Prices for travel are higher around holidays because the demand is much higher.
The large majority of the population are away at work or school during the day, therefore the amount of energy being used in homes during the day is a lot lower. When people get home they turn on the A/C, charge their electronic devices, wash / dry laundry, watch TV, play video games, etc. In the evening, energy load is at its highest and demand peaks. Following the supply and demand principle, as demand increases and supply decreases the price will go up.
SDGE offers two different time of use pricing plans (TOU-DR1 and TOU-DR2)
As you can see from the graph there are three different pricing categories.
- On-Peak – From 4 p.m. – 9 p.m. pricing will be the highest, this is when demand on the grid peaks when a big portion of the population gets home.
- Off-Peak – From 6 a.m. – 4 p.m. and 9 a.m. – 12 a.m. pricing will be in the middle. This is usually when a lot of people are at work or school.
- Super Off-Peak – From 12 p.m. – 6 a.m. pricing will be the lowest, when most of the population is sleeping.
Off-Peak and Super Off-Peak hours vary by weekdays, weekends and holidays.
For most customers, this change can increase prices DRAMATICALLY! You pay almost double the price for using the same amount of electricity during On-Peak (4 p.m. – 9 p.m.) compared to Super Off-Peak (12 a.m. – 6 a.m.).
TOU-DR2 is comprised of two pricing levels:
- On-Peak – 4 p.m. – 9 p.m.
- Off-Peak – 12 a.m. – 4 p.m. and 9 p.m. – 12 a.m.
The advantages of the TOU-DR2 is that it maintains the same pricing schedule seven days a week and is easier to understand.
Why TOU Is Being Implemented?
TOU is being implemented to control consumer behavior of energy consumption, to ease strain energy load at high demand times. The utility company’s claim they can save you money by shifting your energy patterns to different days / times, but in practicality it is not convenient for people once they get home from work to refrain from using AC. Last summer there were record breaking high electric bills, due to sweltering hot days and A/C usage to live in comfort.
A big incentive in 2019 is the California Solar Tax Credit, more and more people are going solar to take advantage of the 30% tax credit. With more people getting solar installed, TOU is being implemented to lower the productiveness of solar panels. By making electricity produced worth less when the sun is up and more expensive when the sun is down, the energy offset on a solar customers bill will be less than it was previously.