How Businesses Can Save With Time-of-Use Rates

Jamie Chesler
A graph charting time-of-use summer rates

Pacific Gas and Electric Company is committed to helping small and medium-sized businesses learn ways they can use time-of-use rate plans to their advantage. Time-of-use rate plans charge businesses a higher rate for electricity during peak demand periods, when the cost of producing electricity is higher than at other times. In contrast, rates are lower during partial-peak and off-peak times, which offset the higher rate charges.


Peak demand periods are weekdays between noon and 6 p.m. during the warm weather months May through October. Businesses that can be flexible and shift their electricity use away from these periods can lower their utility bills while also easing demand on the state's electric grid.


PG&E encourages its business customers to log in to My Energy on pge.com for an effective way of assessing energy bills. Business owners and managers can see how and when they are using energy and learn about the savings they can achieve by shifting their energy use. They can also track estimated energy use by type of equipment and compare energy usage with other similar-sized operations.


Following are some frequently asked questions and answers to help business customers better understand time-of-use electric rate plans.


Why are businesses switching to time-of-use rate plans?

To ensure greater power reliability and a better energy future, the California Public Utilities Commission has set forth a plan to make time-of-use rate plans the commercial standard for all of the state's major electric utilities.1 PG&E has been transitioning commercial and agriculture customers to time-of-use rate plans in accordance with this plan for the last several years.


What is changing in commercial electric bills?

Previously, businesses were billed according to flat electric rates, which means they were charged the same amount for electricity no matter when it was used. When a business customer transitions to a time-of-use rate plan, the cost of electricity will vary based on the time of day and season in which it is used.


What is a peak period?

Peak periods occur weekdays from noon to 6 p.m., May through October, when time-of-use rates are higher.


Where can business customers compare rate plans, and can they switch to a different rate plan?

Businesses can change to any other time-of-use rate plan once a year. If they have not yet transitioned, they can also elect to switch to a time-of-use or Peak Day Pricing rate plan now. Business customers can compare available rate plan options and view their daily usage by visiting My Energy on pge.com.


What is Peak Day Pricing?

Peak Day Pricing was introduced to encourage energy conservation when electricity demand is high, as required by the California Public Utilities Commission. Peak Day Pricing gives business customers a discount* on normal summer electricity rates in return for reducing their electricity usage during the 9 to 15 Peak Day Pricing Event Days per year—typically the hottest days of the summer.2 By using less electricity on these days when the power grid is under the most strain, businesses help keep California's energy supply reliable for everyone—and they can save money, too.


Business customers can participate in Peak Day Pricing risk-free during their first year with Bill Protection, which guarantees they won't pay more on Peak Day Pricing than they would on their current time-of-use rate plan. After 12 months on the Peak Day Pricing rate plan, PG&E will automatically compare what business customers paid on Peak Day Pricing to what they would have paid on their current plan. If they paid more on Peak Day Pricing, they will receive a credit for the difference on their PG&E bill. If business customers decide Peak Day Pricing isn't a good fit, they can opt out anytime.


What is the difference between time-of-use summer and winter seasons?

During the summer season, which is May through October, there are three rate periods: off-peak, partial-peak and peak. During the winter season, which is November through April, there are two rate periods: off-peak and partial-peak. Peak period rates are highest on weekdays, from noon to 6 p.m., May through October. At other times, rates will be lower.


Why do time-of-use rates vary?

Time-of-use rate plans better align the price of energy with the cost of energy at the time it is produced. Lower rates during partial-peak and off-peak hours offer an incentive for customers to shift energy use away from more expensive peak hours, which can help them save money and reduce strain on the electric grid.


How can customers save money on this new rate?

Before, on a flat electric rate, the only way to reduce electric bills was to simply use less electricity. On a time-of-use rate, customers can lower their bill by shifting when they use energy to partial-peak and off-peak hours. Rates during partial-peak and off-peak hours of the day are lower than the rates during the peak hours of noon to 6 p.m. on weekdays. This puts customers in the driver's seat so they can have more control over their bills. PG&E can help customers identify ways to shift energy use away from peak hours and conserve energy in their business with rebates for making energy efficiency upgrades.


Are businesses located in the same neighborhood getting charged the same rate?

The rate a business customer is on is based on the amount of energy their business uses every month. Neighboring businesses may be on a rate that is better suited for their needs, so they may be on a different rate.


Who do customers contact if they have a question about a bill?

Customers can call PG&E's Business Customer Service Center at 1-800-468-4743 to speak to a PG&E Representative about bill inquiries. The staff can help customers navigate their bill or connect them with a Customer Relationship Manager who can walk them through an energy survey over the phone. The manager can see if their business might qualify for potential rebates and other savings programs. Plus, customers can also schedule a free, comprehensive facility assessment.


To learn about other ways that business customers can save energy, download the "The Insider's Guide to Financing Energy Efficiency Projects" from PG&E. This guide will help business owners plan, finance and successfully complete energy efficiency upgrades, repairs and replacements.


Effective summer rates are lower after Peak Day Pricing credits have been applied, but effective rates are higher during Peak Day Pricing Event hours.


Referenced in article:

  1. Pacific Gas and Electric Company
  2. Pacific Gas and Electric Company
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