Justine Quealy
Justine Quealy
Climate Planning Technician

Meeting Our Climate Goals with the Help of TOU Rates This New Year

One year ago, California established an ambitious goal of 100 percent use of zero-emission energy sources for electricity by 2045, along with an executive order from Governor Jerry Brown calling for statewide carbon neutrality by the same year. These goals will be met by increasing the efficiency of energy use and increasing the supply of renewable energy, such as solar and wind, throughout the state. California residents have a key role in helping the state achieve these energy goals, and one way is to shift practices and behaviors to better manage not only the amount of electricity used, but also when electricity is used. If doing more to support local climate action is part of your New Year’s resolutions, you’ll want to understand the importance of time-of-use (TOU).

COMM EK Blog GreenLightbulb 2015 04The Environmental Defense Fund estimates that if California’s current use of clean electricity was instead provided by traditional carbon-intensive power plants, it would generate 8 million additional tons of greenhouse gas pollution each year. Relying on those power plants for our electricity supply rather than the abundant clean energy produced in California would dramatically impede the 11 million tons per year of greenhouse gases we need to eliminate to reach California’s 2050 environmental goals. The good news is that by moving California to time-based electricity rates we’ll reap significant economic and environmental rewards. TOU rate plans have the potential to help California get the most out of existing renewable energy resources, while remaining cost-effective and providing residents and business owners an opportunity to save money on their energy bills.

California already supplies the grid with a substantial portion of renewable energy, but the supply of these renewable resources varies from day to day, and from hour to hour. The state’s renewable energy supply, such as solar-produced power during the day when the sun is out, and wind-produced power overnight when winds are strong, doesn’t always match up with the time electricity is most in demand. The peak demand period in California is from 4pm - 9pm, when most people come home from work or school and energy use in their homes reaches an all-day high just as less clean energy becomes available — requiring the system to rely on more traditional energy sources. The timing of energy use can be aligned with the availability of clean renewable energy by using energy at certain times of the day, avoiding the peak demand period. Californians can ensure they are using clean energy through the Time-of-Use (TOU) rate plans. Under the TOU plans, energy prices will be lower during off-peak hours, and higher during the peak demand period.

According to a recent study by Chapman University, load shifting through TOU rates reduces hourly greenhouse gas emissions (of pollutants SO2, CO2, and NOx), while reducing household energy bills, as well as reducing production costs for utilities. A kWh saved or generated during the peak demand period can have a different carbon content than a kWh during the off-peak period, which only emphasizes the importance of adjusting when energy is used. TOU rate plans can help people to manage energy during these peak demand hours by encouraging people to shift energy consuming activities to off-peak hours when clean energy is available.

TOU rates are meant to encourage homes and businesses to shift their energy use away from peak demand periods, when energy is more carbon-intensive and expensive, and toward time periods when energy is generated from renewable resources and less expensive.

These rates are not only about residents and businesses conserving energy and reducing their energy bills though, they are about joining together to create a better future. Energy load shifting rate plans will make the grid more efficient, support California in meeting its energy and climate goals, while creating jobs, growing the economy, and continuing to lead in climate action. Sounds like the perfect shift to make to kick off 2020.