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What You Should Know About Time of Use Electricity Rates

Time of Use Electricity RatesOne of the benefits of affordable housing is that it leads to less stress, infectious disease, and eventually leads to a level of self-confidence for families. Affordable housing also frees up family funds within families’ shoestring budgets to spend on health care and food. With the opportunity, however, often comes limits.  One of the new boundaries in California’s affordable housing is the concept of Time-of-use (TOU) rate electricity rates.

Time-of-use (TOU) rate – With a TOU rate, your electricity rate changes depending on the time of day. Consuming electricity during super off-peak times is more economical and less expensive than using it during on-peak times.

To be clear, with a TOU rate, your electricity rate changes depending on the time of day. Using electricity at a time when demand is less is more economical and less expensive than using it during on-peak times.

Beginning in 2019 and 2020, Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) will move its residential customers to default Time-of-Use (TOU) electricity rates. Keep in mind that electricity prices fluctuate throughout the day, being the most expensive during the early evening.

These prices determine operating budgets, household bills, and cost-savings for energy improvements at a property. Be mindful of the fact that this transition may negatively impact low-income renters if they are not able to avoid using electricity during expensive peak periods.

Likewise, energy efficiency and solar improvements intended to benefit tenants may result in fewer bill savings. While large commercial accounts such as common multifamily areas and laundry rooms are already on TOU rates, new resident training and education can also motivate them to use laundry equipment outside of peak periods.

The following is essential information to know as the three utilities default all residential customers to a TOU electricity rate:

  • Residential customers will undergo the period of transition to default TOU electricity rates in 2019 and 2020.
  • Each utility is proposing different TOU rates. SDG&E, PG&E, SCE all have different rates and time periods. Here is an excellent primer on different utility company rates.
  • Bill impacts will vary by IOU and depending on household routines. However, all customers should prepare for higher summer bills.
  • Residents can lighten bill increases by modifying their daily routines, avoiding peak periods when electricity is most expensive.

For those looking for additional financial counseling or back-to-school financial tips, Richmond Neighborhood Housing Services offers programs that are designed to support and assist individuals in understanding and mastering the “basic” financial habits of budgeting, managing credit, and homeownership. For additional information on what we offer, reach out to us at, call (510) 237-6459, or visit our programs page. Visit us on Facebook today!


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