Washing clothes at 3 a.m. or running the vacuum late at night isn’t common practice, but it cuts electricity bills and takes pressure off power grids that will be increasingly taxed by electric vehicles and heat pumps to cool and heat buildings.
Maine regulators on Monday expanded their study of time-of-use rates that would bill customers depending on when they use electricity. The Public Utilities Commission studied the issue at the direction of the Legislature and reported in November that “carefully designed” rate changes are “likely to shift load, reduce peaks and thus meaningfully reduce overall costs for ratepayers.”
Time-of-use rates have been available for years for the delivery side of the electric bills, which pays for transmission lines and to move electricity from generating plants to the grid. Delivery accounts for about half, or less, of a monthly bill and Central Maine Power Co. and Versant Power report low participation by residential customers.
Regulators are looking at extending time-of-use rates to the supply side of electric bills by applying it to the standard offer rate used by most utility customers.
Time-of-use rates encourage electricity use at off-peak times to give ratepayers an incentive to wait, for example, to charge their cars overnight rather than immediately after work when many utility customers typically use electricity. Switching to times of day when most utility customers don’t use much power also helps ease electricity loads on the Maine and New England grids.
CMP says peak hours Monday to Friday are between 7 a.m. and noon and 4 p.m. to 8 p.m. Off-peak hours are 8 p.m. to 7 a.m.
A CMP customer on a time-of-use plan consuming an average 550 kWh a month – half at peak hours and the other half at off-peak times – would pay $74.68 for the delivery side of the bill, according to the utility. That’s a savings of $6.41 a month from what a ratepayer on a regular plan would pay. Shifting more electricity consumption to off-peak would yield more savings.
PUC Commissioner Patrick Scully said questions that could be answered by a review are: When is the best time of use? What rates would be charged at peak and at off-peak times? Should customers opt in, opt out or be required to participate? Should rates vary by season?
State Rep. Gerry Runte, D-York, a member of the Legislature’s Energy, Utilities and Technology Committee, said last year when he introduced legislation directing the PUC to study time-of-use rates that Maine has a “smattering” of the rates and that they are limited.
About 4,500 of CMP’s 650,000 customers use time-of-use rates and they must sign up for it, according to the utility. Of Versant’s 165,000 customers, 587 residential users are charged that way, the utility said. For commercial and industrial customers, the pricing is required by both utilities. That drives up their share of kilowatt-hours consumed to nearly 27%, CMP says, even though just 0.9% of its customers have time-of-use billing.
Runte said consumers who take advantage of time-of-use rates have greater control over their electricity bills. The plans also allow owners of storage devices, including batteries and electric vehicles, to charge at low rates and act as power sources during expensive peak periods, reducing peak demand on the grid, Runte said.
Incentivizing ratepayers to shift electricity use also may help reduce greenhouse gas emissions. Total annual U.S. electricity net generation by utility-scale electric power plants in 2022 emitted about 1.65 billion metric tons of carbon dioxide, according to the U.S. Energy Information Administration.
The Governor’s Energy Office said time-varying rates could encourage customers to shift electricity use from hours when emissions from the electric generation sector are relatively high and toward hours when emissions are relatively low. And time-of-use rates also could encourage electricity use at times that align with less costly renewable energy use, such as solar.
ISO-New England, the region’s grid operator, said in a recent report that “aggressive demand response” – ratepayers cutting their electrical consumption in exchange for some form of compensation – and the use of advanced or smart thermostats that adjust temperatures during peak times could help shift electricity loads to times of lower demand.
Overall, the practices could reduce the need to spend as much as $10 billion for a transmission buildout to support greater electrification that reduces greenhouse gas emissions.
“It’s $10 billion we can’t afford not to save,” PUC Commissioner Carolyn Gilbert said.
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