I recently received the news that my electricity provider will be imposing time-of-use rates on my areas in 4 months.

This first came up 3 years ago and I blogged about it asking Will That New Electricity Meter Make you Poor and Fat?  It’s going to effect more and more people over time.  Let’s explore if I and perhaps you too, will end up paying more, or doing things to avoid paying more (like eating later at time) or working at home in more humid conditions during the summer…

That electricity meter was installed, has been feeding data to the electricity company – more on that in a moment – and they are ready to start complicating my bill.

Below is a chart showing the current rates (same all-day all-year, increasing after a level of consumption) vs. the new rates (changing over the day and the year).  It also shows how the rates and time-slicing has changed from the original proposals in 2008 to the rate that will go into effect in 2011.

	2008		2011
Rate Type	Rate (cents) per kWh	When applies	Rate (cents) per kWh	When applies
Current	5	First 2000kWh	6.8	First 600kWh
Current	5.9	After 2000kWh	7.9	After 600kWh
Off-Peak	3	Mon-Fri 22:00 to 07:00 all-year All weekends/holidays	5.9	Mon-Fri 19:00 to 07:00 summer/winter All Weekends/Holidays
Mid-Peak	7	Mon-Fri 07:00 to 11:00 and 17:00 to 22:00 in the summer Mon-Fri 11:00 to 17:00 and 20:00 to 22:00 in the winter	8.9	Mon-Fri 07:00 to 11:00 and 17:00 to 19:00 in the summer Mon-Fri 11:00 to 17:00 in the winter
On-Peak	8.7	Mon-Fri 11:00 to 17:00 in the summer Mon-Fri 07:00 to 11:00 and 17:00 to 22:00 in the winter	10.7	Mon-Fri 11:00 to 17:00 in the summer Mon-Fri 07:00 to 11:00 and 17:00 to 19:00 in the winter

For the visually inclined – here’s how the new 2011 rates work in a pie-chart as published by the electricity company.

I few things to note:

• Rates have obviously gone up a bit in 3 years – 36% on regular rates – as horrible as that is, let’s ignore that.
• The break point for higher rates has come down from 2000kWh to 600kWh – so paying the higher rate more quickly – let’s ignore that too.
• The average rate for a summer day on the new rates is 7.85c/kWh assuming constant rate of usage through the day.  This is higher than the current starting 6.8 rate and as high as the 7.9c/kWh rate.  Whether the real average rate is higher or lower for you, really depends therefore on your weekday daily-usage patterns.

The flyer includes the annoying statement: "In a 168-hour week, only 30 hours are at on-peak times.  There are three-times as many hours at off-peak periods."  This is annoying because, it’s of now benefit unless one can pick when the on-peak times are – the rates are most expensive at in-opportune moments for many – and it doesn’t mention that for 50% of week days (or 36% of the whole week), rates are now higher.

Let’s dig in to see what the consequences may be:

Some possible bill differences moving to the new rates for various power usage:

• To cook dinner, now costs more during weekdays: 8.9c/kWh compared to 6.8c/kWh (if you haven’t used up the 600kWh), that is unless, you are prepared to cook after 7pm and eat even later (and potentially get fatter) or pre-cook much of your food during off-peak. However, realistically across the week and year that’s (say 2kW for 0.5 hour in an oven = 1kWh) 2.1c per day more x 125 days (summer) + 3.9c per day more x 125 days (winter) – 0.9c per day less x 100 days = $6.60 per annum more. That’s not so bad, but what else do I have running that will now cost more…
• At one extreme – to operate air-conditioning at home (if you are at home during the day) now costs considerably more: 10.7c/kWh compared to 6.8c/kWh.  If the A/C is on 50% of the time (wild guess) from 7am to 7pm for 2 months at 3kW, that’s 3kWh hours at 2.1c more + 3kWh at 3.9c more x 5 days x 8 weeks = $7.20 more for the summer.  This doesn’t include the fan motor.
• In middle may be things like using the dryer which could be more or less going forward depending on your schedule.
• Anything that is a constant all-day, e.g. stuff-plugged in on standby, or the fridge, etc. is going to cost you more on average.  I use between 35kWh (winter) and 66kWh (summer) per day.

Real data check:

The new networked meter has been collecting data for a while and as a customer, I can go to the company’s website and check out my actual house usage.  So, we can actually see where the majority of my usage is, and therefore if my bill will be going up as a result of these new time-of-use rate on my existing household pattern…

They provide pie charts and bar graphs with numbers, but also exports to PDF & Excel. 

So for July so far, my average is: 7.4c/kWh which is higher than the current 6.8 (and a bit lower than the 7.9 for over 400kWh).

Off-Peak – 63%; Mid-Peak – 16%; On-Peak 21%

Extrapolating my online consumption of kWh the 21 days of July to 31 days and comparing the cost using my real average 7.4c rate to the cost with the current 6.8c (and 7.9c over 600kWh), I’d be paying $5 more in July under the new scheme.  My estimate of $7.20 more for 2 summer months of A/C didn’t look too shabby.. 

Conclusions:

• So, with no change in usage, the new plan does costs me more ($5+ more a month in the summer), but considering that a gas-powered furnace fan doesn’t do much more work in the winter and there’s no A/C requirement, it’s not looking like like it’s going to be a huge amount more for the whole year – perhaps $50 a year more – well see.
• Have A/C during the day?  You have to pay more to keep it the way you like it or turn down the thermostat to not pay more.
• Cooking dinner? The cost of doing this before 7pm goes up so you have to eat later (potentially less healthy) or pre-cook cook during off-peak or pay a little more over the year.  
• You will pay more over the year for all those 24-hours-a-day constant drain things you have plugged in.
• You could end up going either way for things like using an electric clothes dryer, depending on when you end up doing those things.  If you already do a lot of this over night or on the weekend, and you don’t have A/C (or other major power draws) on much during the day, you may see your bill stay the same or go down.
• Psychologically, I think some people may temporarily change their habits to avoid larger bills initially, but end up going back to their previous routine and paying a little more.