Sacramento utility SMUD to transition to new time-of-day rate structure for electricity use

SMUD, Sacramento’s community-owned, not-for-profit electric utility, is transitioning its customers to its new Time-of-Day rate structure starting October 1, 2018. Time-of-Day pricing is based upon when energy is used, as well as how much is used, because rates vary by time-of-day and by season.

Time-of-Day is a form of time-based pricing where electricity will cost more during summer weekdays from 5 to 8 p.m., but much less during the rest of the day, and on weekends and holidays. And winter rates are even lower.

It costs two- to three-times more to provide electricity during summer peak hours versus non-peak hours. Until now, SMUD was able to blend those rates throughout the day, but as demand and pricing increase, it has become more difficult to fairly blend those rates. The new rate structure better balances what it costs to provide electricity and rewards those who conserve.

The new rate structure puts pricing into customers’ hands. By shifting or reducing energy usage, customers can actually save on their bills and help SMUD continue to provide clean electricity, at some of the lowest rates around.

SMUD is working with the community to ensure a smooth transition and is reminding customers to conserve energy during summer weekdays from 5 to 8 p.m. to help them save.

SMUD expects that about half of its customers will save on this new rate structure, and the other half may see a minimal increase if they don’t reduce, but for SMUD this is revenue neutral. SMUD has made this rate available to customers for years and has had great results in terms of customer satisfaction.

For those customers who may have trouble shifting their energy usage, SMUD is offering an alternative fixed rate that offers a more consistent bill, yet is about 4% higher over all hours of the day.

SMUD has energy-saving solutions available on its website and offers the following tips to save money:

  • Shift the use of appliances to off-peak hours whenever possible.
  • Use electronic devices in battery mode during peak hours and charge them in off-peak.
  • In the summer, use fans and close blinds on windows that get direct sun.
  • Swap out light bulbs for LEDs.
  • Use a programmable/smart thermostat to help control HVAC during peak and non-peak hours.
  • Customers can also get customized tips, manage their bills and set up alerts on the website.

The Time-of-Day rate transition will begin in October and is expected to be complete by May 2019. Thirty days prior to the switch, customers will receive a notification letter and a rate comparison report, along with a welcome packet and follow-up communications to ensure that customers can make changes that best fit their home and lifestyle. For more information on SMUD’s new Time-of-Day pricing structure, visit smud.org/TimeOfDay.

News item from SMUD

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