Time-of-Use FAQs

Will Time-of-Use rates save me money?

The short answer is – maybe. There are many factors that go into determining if a customer will be able to save money by switching to a TOU rate. Some of these factors include the total amount of electricity used per month, the individual customer usage patterns, willingness to adapt lifestyle in order to shift usage to Off-Peak hours, etc. In order to save money, customers must be able to shift enough usage to the Off-Peak times.

As a general rule of thumb, an average customer will need to shift at least 78% of the total monthly usage to Off-Peak hours with the remaining 22% On-Peak in order to save money. The more usage that a customer is able to shift to Off-Peak hours, the more money that customer might save. For example, a customer who uses 1000 kWh in a month and is able to shift 85% or 850 kWh to the Off-Peak hours will save approximately $13.14 per month over the regular residential rate schedule. However if this same customer is only able to shift 60% or 600 kWh to the Off-Peak hours then he will have actually spent $29.61 more than the regular residential rate. Contact a GCEC representative at (928) 485-2451 to discuss how you might be able to save money on TOU rates for your individual circumstances.

Do Time-of-Use rates help protect the environment?

It is generally agreed upon that if TOU rates reduce the peak demand then yes there is an environmental benefit to having these rates. The power grid has to be designed to meet peak demand. It’s like having a car with a big engine because once in a while you need the power to drive fast. The rest of the time a smaller engine could work but you still need to have the extra power in reserve in order to drive fast again.

Charging higher electricity prices during peak demand has the effect of shifting demand to the least expensive times. This in turn means that fewer new power plants (often powered by coal or natural gas – fossil fuels that produce greenhouse gases and air pollution) need to be built to meet the peak. In short, it is a good way to better use what you already have.

Why do we need Time-of-Use rates?

Time-of-Use (TOU) rates help reduce the demand for electricity during “peak” times of the day when it costs the utility company more to purchase that power.

The principle is simple. Demand for electricity varies during the day. It is usually lowest in the middle of the night when most people are sleeping and commercial/industrial buildings are not in operation, and it is highest from about noon to 9 p.m. when most of us are working, cooking, watching TV, running the dishwasher, etc. Very hot and very cold days also make a big difference (more power is required to run air conditioners or heating systems).

What TOU rates do is reflect that reality into electricity prices to create incentives that encourage people to use less electricity when demand is highest and more electricity when it is lowest. The total amount of electricity used could be the same, but the peaks will be lower and the valleys won’t be as deep. This is in opposition to flat rates (same price throughout the day), which does not make it any more expensive to use power during peak time, leading to huge peaks.