When everyone returns home from work in the late afternoon and early evening, plugs in their Teslas, turns down the air conditioning, fires up the big-screen TV, and opens the fridge, looking for a cold beverage, this increased usage can overload the grid’s ability to provide adequate electricity during critical hours of the day.

In the coming years, with the proliferation of AI data centers, a massive increase in EV chargers, and the relentless growth of Clark County, this “peak demand” will put an enormous strain on the electric grid infrastructure.

Time-of-use billing is a strategic tool designed to manage peak hours effectively. Significantly increasing electric rates during these peak hours (typically between 6 and 9 PM) serves as a deterrent for excessive electricity use.

In California, PG&E raises rates substantially during peak hours, charging “Time-of-Use Peak Pricing.” The average “bundled” rate plan for PG&E residential customers is 45 cents per kilowatt hour as of January 1, 2024. However, the cost per kWh of electricity ranges from 34 to 72 cents per kWh, depending on your rate plan and the time of year.

NV Energy ratepayers will be next in line for time-of-use billing after Tier 4 Net Metering reaches capacity, which is soon. Currently, the NV Energy rate per kWh is 16.5 cents. However, if you think it couldn’t double and double again in the next five to ten years without net metering, think again.

Once net metering is gone, homeowners installing solar energy systems will have to invest in expensive backup batteries to offset the excessive electricity rates from the grid during peak periods.

Before it’s too late, I advise taking advantage of net metering with free solar energy and getting grandfathered in for the next 20 years. Done. You won’t have to worry about any of this.

By the way, if you plan on going solar, DO NOT SIGN UP FOR TIME OF USE BILLING! Sorry to yell. It doesn’t make sense to combine net metering and time-of-use billing. Even if you decide not to go solar and continue to pay NV Energy, seriously consider the repercussions of time-of-use billing. Do you really want NV Energy controlling your thermostat? You can contact NV Energy Customer Service for clarification. Good luck. I spent 50 minutes on the phone with them to explain the difference between Net Metering Rider A and Rider B and never got an answer. I emailed my questions. No response. Frankly, I don’t think anyone knew the answer. After some research, I eventually figured it out for myself.

Check out the following article that appeared on the Los Angeles KTLA 5 local news website:

Consumer News

Southern Californians Hit with Skyrocketing Electricity Bills

by: Peter Wilgoren
Posted: Aug 16, 2024 / 03:54 PM PDT

If your electric bill this month was sky high, it wasn’t just scorching summer heat that was to blame, and you’re NOT alone. Many Southern California Edison customers are feeling the heat living with the TOU pricing system: That’s ‘Time of Use.’

Put into effect in 2020 and 2021, TOU pricing is exactly what it says: You pay different rates for your electricity depending on the time of day you are using it. As SCE puts it, it costs more to produce and deliver electricity during different times of day, so this is supposed to provide “an incentive for customers to shift electricity use away from more expensive peak hours.”

SCE admits rates will generally be higher during summer weekday afternoons. If you run the AC, work at home, do laundry during those hours, you are paying MORE than if you wait and do those things during later or off-peak hours.

We asked SCE for specific data on what the TOU pricing has done to people’s bills.

It didn’t provide that info. Anecdotally, this user (I am an SCE customer) has seen the afternoon TOU bill get much larger, especially with two kids home during the hot southern California summer.

Inland Empire residents endure heatwave amid power outage

While working on this story, we received email after email from KTLA viewers:

Linda Lynch, a KTLA viewer in the Antelope Valley, was shocked to see that her electric bill skyrocketed to $900 this month, hundreds MORE than usual. Linda writes that she can barely afford food, never mind electricity.

We should point out that the Antelope Valley in Southern California saw excessive heat warnings issued for stretches of days this month. The warnings are issued when heat is forecast to be extreme and often come with an advisory to keep cool and only go out if necessary.

And Linda wasn’t the ONLY one who emailed.

Carla Chang writes, “Hello! Please look into whyyyyyy Edison is charging so much for electricity. People are receiving $600-$1000 bills.”

Sarah Clifford sent us her bill which was $1128 this month alone, and Sara says that’s the “discounted rate.” Sarah says she keeps her thermostat at 78 degrees whenever possible.

Melissa Avalos says, “There has been a rise in our electricity bills that is beyond this earth. We went from paying $86 dollars a month to $400 dollars a month and don’t even run our air at night. Something needs to be done as we are seniors and barely making enough to cover this increase.”

Not all of this may be due to TOU pricing, although at least some of these are SCE customers on TOU rates. After all, it has been a record-breaking hot summer. But many are asking—IS THIS FAIR?

People use electricity when they need it. People pay their electric bills. Why should people be penalized because they need to use electricity in the middle of the afternoon?

We put the question to KTLA consumer expert David Lazarus.

“Time of use pricing for power might strike some as unfair,” Lazarus said. “After all, energy is energy. Why should the price change at different times of the day? In fact, it’s a pricing system that makes good economic sense, rewarding consumers for responsible use of resources.”

Lazarus acknowledges that may be little consolation for people getting their bills this month.

When TOU pricing was first put into effect, customers were transitioned into TOU pricing unless they OPTED OUT. Edison points out that if you ARE seeing bills skyrocket with TOU pricing—you CAN still use the rate plan comparison and see if something called a “tiered rate plan” is better.

Under a tiered rate plan, the bill you pay is based on the TOTAL amount of energy you use, regardless of WHEN you use it. SCE also points out that there are potential discounts for those who qualify and are having trouble paying their bills.

No matter WHICH plan you use, Laz says he’s not surprised customers—especially in lower income brackets—are feeling the squeeze.

“Consumer advocates correctly warn that lower-income households could face higher bills if utilities boost prices during intervals of high demand,” he said. “It’s the same issue ride-share companies ran into when they introduced ‘surge pricing’ – higher fares during times of high demand. Consumers viewed that as a money grab. It’s a perception utilities need to avoid”

Gabriela Ornelas, SCE spokesperson, tells KTLA, “The greatest impact we see on monthly bills is overall energy use, regardless of the rate plan.” She says there IS help available, “We know high electric bills can be hard. We have resources for customers and tips to help save on summer bills.”

__________

Please feel free to contact me to set up a solar energy consultation to discuss your energy future.

Matt Kreuz, Solar Energy Consultant
Call or text: (702)216-1212
Email: solar@mattkreuz.com