Save on electricity costs by avoiding peak hours

Did you know electricity rates can change during the day, by as much as 40 percent?

You might be able to save money by planning when you do laundry or run the dishwasher. As explained on the conEdison website:

Energy-conscious customers can save money if you use electricity during off-peak periods when costs are lower.

Our Time-of-Use program is designed to encourage customers to reduce electricity use during peak hours. Under the program, you will be charged for electricity depending on when you use it. The rates are lowest on off-peak periods: weekends, holidays, and weekdays from 10 p.m. to 10 a.m., when usage and the cost of electricity are low. Rates are higher during other periods, when usage and the cost of generating electricity are much higher. It may help to view these rates in the same way as peak and off-peak telephone rates or airline fares.

Find out if your electric rates and peak/off-peak hours

One thing to be aware is not all companies charge separate peak rates. You have to do some digging to find out.

The best way to find out is to call your electric company and ask them how they charge you. See if they have different rates for peak hours, or ask if they have a time-of-use plan where you can save money by using off-peak hours.

The next way is to check your bill. There might be two separate rates for electricity which could indicate peak and off-peak rates. (My bill just has one rate as my city does not distinguish time of usage yet).

The last way is to check the website. The conEdison except above explains their off-peak hours: “the rates are lowest on off-peak periods: weekends, holidays, and weekdays from 10 p.m. to 10 a.m.” But note these off-peak hours are not standardized so be sure to check with your company.

Note: if you don’t qualify now, keep an eye out. Your city might start classifying peak use in what is often called a time-of-use plan.

How much you could save

It might not sound like a big deal to shift your energy usage, but it can add up over time.

A while ago Bankrate.com profiled this same energy saving tip, and one user explained how savings added up:

I almost saved $30 every month. It’s month after month, and it’s not that you’re doing something special. And after 12 months, you have $360. So for waiting for a couple of hours at night, you save a couple of hundred dollars a year.

This is a very large amount, I think, for simply being mindful of when to use appliances and energy.

Major appliances to shift usage

This tip isn’t about going crazy and being nocturnal just to get the lowest energy rate.

The point is to try and shift some of the major energy using devices to off-peak hours, like:

Washing machine
Clothes dryer
Dishwasher
Electric cooking

Closing trivia: pumped storage units

Wouldn’t it be great to buy electricity during off-peak hours and sell it during peak hours?

That’s essentially what electric companies are doing when they build Pumped Storage Hydroelectric plants.

Water is pumped up elevation during off-peak hours and then released down a mountain during peak hours to generate electricity.

The TVA website explains how one of its plants Raccoon Mountain works:

The plant works like a large storage battery. During periods of low demand, water is pumped from Nickajack Reservoir at the base of the mountain to the reservoir built at the top. It takes 28 hours to fill the upper reservoir. When demand is high, water is released via a tunnel drilled through the center of the mountain to drive generators in the mountain’s underground power plant.

These plants are limited because they are expensive to build and not a renewable resource, but they are still useful to manage energy supply in a weird type of arbitrage. Pretty neat!



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  • http://computeit.info calculateonlinedotorg

    In the Netherlands most people are trying too hard to save just a few dimes.

    My former neighbors occasionally kept me awake with their noisy washing machine in the middle of the night saving at most 1 euro per week.

  • E

    I read about an A/C unit that saves both money AND electricity by running at night:

    At night the outside temperature is cooler so a refrigerator outdoors would have an easier time making ice. It turns on at night and makes ice. The A/C coils pass through the ice that’s created and during the day they help to cool the house. Basically you are storing the night’s temperature for the day’s use. Combined with cheaper off-peak electricity, this could be a huge win!

  • http://www.purplepawn.com David

    I’ve worked in the electric power business for 20 years and I think you’d find many interesting and unexpected things in the pricing of electricity.

    For example, in the early days of central power stations, most utilities accepted electricity as a luxury good because of how expensive it was to generate. Utility owner Samuel Insull understood the benefits of “massing production” and ordered his salesmen to make whatever adjustments were necessary to their prices in order to sign up customers. Bigger power plants meant cheaper electricity.

    But in those early days, electricity was used almost exclusively for lighting at night. Thus, power plants, which represented a significant capital investment, sat idle for most of the day. The cost of burning fuel and operating the plant was relatively small compared to the cost of building the plant. Utilities eventually started billing customers a capacity charge based on their peak rate of usage (or number of light bulbs), independent of the actual total energy consumption in a month. The meters used for residential customers often don’t store that information. So you’ll still see that many utilities charge decreasing rates, assuming that within a certain class of customer, greater total energy consumption means more consistent energy use.

    In another approach to the same problem, Thomas Edison and Samuel Insull sponsored the development of electric traction railroads (trolleys) to promote the daytime use of electricity.

    Finally, I’ll point out something that still surprises me no matter how many times I’ve seen it happen. In most situations a seller would be willing to offer a discount to a buyer that makes a long term commitment, as this reduces the seller’s risk. In the business of buying and selling electricity though, the opposite is true. For long term deals, sellers demand a premium. The market price of fuel is highly variable. Thus, longer term deal increase the risk to a seller of electricity.

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