It's HOT here in the summer and you probably dread your hot-weather electric bills. So you have resolved to live at 80 degrees 24 hours a day to keep AC use down. You’re planning to grill dinner outside every night so the range doesn’t heat up the house. And you’re switching as many light bulbs as you can to energy-saving LEDs.
But one more important change can take some pain out of your utility prices, an alternative that people often do not consider when they move to Arizona and sign up for electric service. What’s the secret? Choose what is called a “usage” or “time-of-day” or “time-of-use” pricing plan.
How many homes have these plans? According to SRP (Salt River Project), which has about 882,000 residential electric customers, of which almost 242,000, or about 27 percent of households, have enrolled in these plans. APS (Arizona Public Service), on the other hand, has about 1.02 million residential customers, of which about 528,000, or more than 51 percent, are in these plans. So plenty of residents out there could make the change and probably save money.
Why doesn’t everyone enroll? We don’t want to speculate too much, but many may be unaware of the plans or confused about them even though utilities try to educate customers about their options. Some may be just too busy to think about doing the research.
“If people are worried about whether these plans will work for them, we do give them 90 days to try them out,” says Kathleen Mascarenas of SRP media relations. “If they end up spending more on the new plan, they can change back and we will refund the difference.”
Of course, some households may have very low electric use to start with, for example, if your home or apartment is 1,100 square feet or less and only one or two people live in the house. In cases like that, these plans may not be beneficial.
But if you have a larger home with several residents, these plans can save a household $400 to $500 a year, according to SRP. The theory behind the plans is that you can save money on your bill overall if you avoid using electricity during the peak demand times – when utilities pay more for power themselves.
We can’t list all the details, but here is how some plans work:
SRP, for example, has EZ-3 where customers can save an average of 6 percent annually over the basic plan by limiting on-peak energy use for three consecutive hours that cost more between 3-6 p.m.. During the off-peak hours in July and August, the customer pays 8.64 cents per kilowatt hour; during on-peak hours, the customer pays 35.88 cents per kilowatt hour. Weekends and major holidays, they’re billed at the off-peak hours all day. Prices vary at other times of the year.
According to Jenna Shaver of APS media relations, the most popular APS plan is Time Advantage 7 p.m. to noon in which customers try to limit energy use in on-peak hours of noon to 7 p.m. Mondays through Fridays. Just as with SRP, weekends and major holidays are off-peak. From May to October, the customer pays 6.118 cents per off-peak kilowatt hour and 24.477 cents per on-peak kilowatt hour. From November through April prices are slightly lower.
It gets fairly tricky trying comparing basic or standard plans with the time-of-day price plans we’ve been discussing. For example, on the SRP Basic Plan, residential customers pay from 11.04 to 12.70 cents per kilowatt hour in July and August when they use from 701 to 2,000 kilowatt hours each month. They pay an even higher rate if they go over 2,000. APS uses a similar but slightly different method for computing the price of power used during the summer for its Standard Plan. You really have to study your bill and check online using your utility’s comparison charts to see what works best.
If you sign up for a time-of-use plan, you can generally have it “installed” on your meter from the utility’s office almost immediately. You don’t have to have someone come out to the house to program the change.
Here are more ideas on how to live with less electricity during the on-peak hours when your energy costs more:
- If you expect to be at home during the expensive on-peak hours, you can pre-cool your house in advance. Let’s say your on-peak costly hours are from 3 to 6 p.m. At about noon, set your thermostat four to six degrees below your usual temperature setting. Then for the 3 to 6 p.m. hours, set the thermostat four to five degrees above your usual temperature so the air conditioner runs very little, if at all. By running the AC at a lower temperature earlier in the day, before peak price time arrives, you can cool down everything in your house. Those cooler walls and pieces of furniture maintain the lower temperature in your rooms for a while so you may not notice the lack of AC.
- If you need to keep resetting your air conditioning a lot during the day to avoid peak price times, then you might want to use a programmable thermostat, which many homes already have. But there is a downside to programming thermostats, too, if there are too many residents in the house who keep changing temperatures when they’re uncomfortable.
- Some homeowners go further and have computers installed on their electrical panels. That device can monitor levels of electrical use in a home and automatically shut down the air conditioning or other appliances temporarily when the residents may be about to go over the level they want to pay in their plan, according to Steve Koepp of Advanced Home Systems of Phoenix. Most people hardly notice those temporary shutdowns, he says.
One more question that homeowners often ask us about air conditioning: “Can’t I save a lot if I turn up the thermostat to 80 degrees whenever I leave the house?”
The answer: If you’re only gone a short time, probably not. If you’ll be away less than six hours, leave your thermostat as is. And remember, if you come home and the house seems really, really hot, you may run the air conditioner so long and hard to get comfortable again that you end up using more energy, not less. You best bet is to set a thermostat on reasonable temperatures, programmed to go on and off at the right times.