Residential Time of Use Rates

Ames Electric Services is implementing a pilot program for its new Time-of-Use (TOU) electric rates for residential customers and has selected a small group of customers to pilot the new rates. TOU rates are calculated so that total energy costs, on average, will be very similar for the average customer. Customers who shift some of their energy usage to off-peak periods have the potential to see significant savings in their electric bill. Participants will be the first users of the Time-of-Use rates and will help provide feedback to the utility before these new rates are available to a broader audience.

Time-of-Use rates encourage customers to shift energy usage from Ames Electric’s peak period to off-peak and super off-peak periods, which can lower costs for participants and the utility by reducing overall energy usage during the utility’s highest cost periods.

Time-of-Use Rates can be beneficial for all customers who manage their electric usage and can be especially advantageous to those charging an electric vehicle. Electric vehicle charging is a large energy use that can easily be shifted to off-peak and super off-peak periods. Offering a very low energy cost for off-peak charging is a significant way Electric Services hopes to help encourage the adoption of electric vehicles, a key component of the City’s Climate Action Plan.

Time-of-Use rates create energy pricing that more closely reflects the cost of electricity during select periods within a day. Ames Electric is adopting a three-period rate structure. The three periods are:

• On-peak rates: From 2 to 6 p.m. on Monday through Friday
• Off-peak rates: From 7 a.m. to 2 p.m. and from 6 to 8 p.m. on weekdays
• Super off-peak rate: All other times, including weekends and six major holidays
   

Residential Time-of-Use Rates

Frequently Asked Questions (FAQs) About Time-of-Use (TOU) Electric Rates

1. What are Time-of-Use (TOU) electric rates?
TOU rates are a type of billing system where the cost of electricity varies depending on the time of day. Under a TOU rate plan, electricity is more expensive during "on-peak" hours when demand is highest and cheaper during "off-peak" hours.

2. How do TOU rates work?
Ames Electric Services’s TOU rates divide the day into three different time blocks, "on-peak," "off-peak," and "super off-peak." Rates are highest during peak hours (2 to 6 p.m. on weekdays) and lowest during super off-peak hours (8 p.m. to 7 a.m. on weekdays, plus all day on weekends and holidays). Your bill is calculated based on the amount of electricity you use during each of these blocks.

3. Is special equipment required?

Customers are not required to own or purchase any special equipment to participate in TOU rates. Ames Electric Services is planning to replace electric meters throughout the community over the next several years. While most meters currently in service only record the total amount of energy consumed, the new meters will also be able to record when the energy is used. Participants in the TOU pilot will have these new meters installed sooner. There is no cost to the customer for the meter replacement.

 4. Which days under the TOU rate plan are designated as holidays?

Holidays under the TOU plan are New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. All hours during these six designated holidays are billed at the super off-peak energy rate.

5. What are the benefits of TOU rates?
The main benefit of TOU rates is the potential for savings. By shifting energy use to off-peak times, such as running appliances overnight or charging an electric vehicle when rates are lower, participants can reduce their monthly electric bill. TOU rates also encourage more efficient energy use and help reduce demand on the electrical grid during peak times.

6. Who is a good candidate for TOU rates?
TOU rates work best for people who can adjust their electricity usage to off-peak times. For example, if you’re able to do laundry, run the dishwasher, or charge an EV during off-peak hours, you may see significant savings. People with flexible schedules or automated systems that control when appliances run are ideal candidates for TOU plans.

7. How much can I save with TOU rates?
Savings vary depending your usage patterns and how well you shift your energy usage. By avoiding peak times and making the most of off-peak periods, some households can reduce their bills by 10 to 20%.

8. Will my rates increase if I don't adjust my energy use?
It’s possible. If you use electricity mostly during peak hours, TOU rates could increase your bill compared to a standard rate plan. TOU plans are best suited for those who can change their habits to make the most of off-peak rates.

9. How can I adjust my energy use to benefit from TOU rates?
Simple changes can help you shift your energy use to off-peak times. For instance, running appliances like dishwashers, washing machines, and dryers at night, adjusting thermostats, and charging electronics or electric vehicles overnight can all reduce peak-time usage.

10. How do TOU rates affect electric vehicle (EV) charging?
TOU rates can be especially advantageous for EV owners who can charge their vehicles overnight during off-peak hours. Since vehicle charging is a large energy use, and one easy to shift to evening hours, EV owners may greatly benefit from TOU rates by charging their vehicles during the super off-peak hours.

11. Can solar customers sign up for the TOU rate pilot?

Yes, solar customers are welcome to participate in the TOU rate pilot. All customers will be billed for energy they buy (import from the utility) at the same prices listed in the table above. Any energy produced by solar and sold back (exported) to the utility will be purchased by the Ames Electric Services at the Renewable Energy Buyback rate, regardless of the time of day the energy is sold.

12. Wow, those summer on-peak rates are high! Will I really see savings from this program?

Keep in mind that the summer on-peak rate is only from 2 to 6 p.m. on weekdays during the four summer billing periods (June-September). That’s 250 hours per year, or only 3% of the hours in a year. Signing up for a TOU rate means you can really focus on saving energy at that peak usage time and worry about it a bit less during the off-peak hours.