SoCal Edison’s new rates will vary with the time of day. You may not benefit much — or at all

Since 2015, the California Public Utilities Commission (CPUC) have been experimenting with enrolling electricity customers in the so-called time-of-use rate plans. In March of 2019, San Diego Gas & Electric (SDG&E) became the first utility to adopt these new rates, and Southern California Edison (SCE) and Pacific Gas & Electric (PG&E) were given until October 2020 to do the same.

Under time-of-use (TOU) rates, electricity will cost more in the evenings and less during the mornings. Rates will also be more expensive during the summer and less during the winter. SCE will offer a TOU rate in which the peak period time will be between 5 p.m. to 8 p.m. or 4 p.m. to 9 p.m. There will also be an optional “TOU Prime” for Electric Vehicle owners. These rates will help SCE reduce their expenditure, saving an estimated $55 million per year. But, will their savings translate into more customer savings or just private investors gains?

Studies have found that only 10% of customers would benefit from these new rates while 90% could be hurt by them. SCE’s claims of customer savings are based upon customers changing their energy usage behavior. Such changes as alter the time they use their appliances and implementing other technologies like smart thermostats, programmable devices, LED lights, energy-efficient windows, more efficient AC units and better insulation to obtain this “savings”.

The important question becomes: how much people ultimately change their behavior? Because a lack of understanding and adapting to the new rates will undoubtedly see more customers’ bill go up than down.

The reality is the majority of customers don’t truly know much about the rate schedule they are on, or even understand their electrical bill. How is SCE supposed to expect their users now to say, “My hair dryer uses 1,600 watts, and I’ve been using it for 10 minutes, so here’s how much that costs.”

These time-of-use rates should be all the incentivize you need to switch to solar and battery storage. By doing so, you can charge your battery during off-peak hours and then use the stored energy to power your homes when electricity from the grid is more expensive. This will allow you to avoid the high cost of the utility’s electricity and gain energy independence.