time-variant pricing

Energy Savings

Time-Variant Pricing & Energy Efficiency

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More and more electric utilities across the country are offering time-variant pricing to residential customers. It’s not only a money-saver for those who take advantage of this new pricing method, it also makes basic energy efficiency habits pay off more than ever.

In years past, electricity was typically priced at a flat rate: no matter what time you used it, you paid the same price. Time-variant pricing, however, means electricity costs more in high-demand periods of the day and substantially less during periods of low consumption. By synchronizing electricity use to take advantage of lower-priced periods — as well as taking common sense measures to increase home energy-efficiency — you can realize meaningful savings on your monthly electrical bills.

Most time-variant plans divide electricity prices into three levels:

  • Peak hours. This is typically daylight hours from late morning through early evening. Rates are higher during this period.

  • Off-peak hours. Usually beginning at around 8 p.m. and continuing overnight, off-peak pricing provides electricity at bargain rates.

  • Critical peak periods. During limited periods of unusually high consumption—for example, a severe heat wave—utilities may temporarily impose above-market electricity rates. However, customers who keep consumption below specified levels during the period will frequently be exempt from critical peak cost increases.

To maximize the benefits of time-variant price scheduling, here are a few suggestions:

  • Check with your utility to determine the exact timing of each price level, then set your programmable thermostat accordingly to enhance savings. For example, you may want to bump up the A/C thermostat setting a few degrees during the peak pricing period and lower it during off-peak hours.

  • Schedule high-consumption activities—like running the washer and dryer or using the dishwasher—to take advantage of off-peak hours at nights and on weekends.

  • If critical peak pricing takes effect, try to keep consumption below the trigger point that imposes special increased rates. Open windows at night for cooling, run efficient ceiling fans to keep air moving, turn off lights, etc.

For more ways to make the most of time-variant pricing, ask the professionals at Air Assurance.