Sense Blog

Understanding Time of Use Rate Plans

Understanding your utility’s energy rate plan can help you save on your utility bill, but rate plans can be confusing. Energy rate plans can vary in structure, with the cost of electricity changing throughout the day. One increasingly common structure is a time of use rate plan, where seasonal rates offer cheaper prices late at night when electricity demand is lower and higher prices during the times of day when demand is higher. With the Time of Use (TOU) feature in the Sense app, it’s easy to keep track of time of use rates so you can lower your utility bill.

There are several different types of electricity rate plans (including time-of-use) that are currently available in North America, and each can vary in structure from region to region. Some of the most common energy plans in North America are:

Fixed-rate plans charge homeowners a standard fee for each kWh of electricity they use each billing period. Electric providers that offer fixed-rate plans purchase electricity in bulk at an average market price and pass that cost along to customers. While your bill changes depending on how much electricity you use, the rate stays the same throughout the day, and typically year-round. This is ideal if you want a more consistent and predictable monthly bill. Sense can support fixed-rate plans in-app to provide cost data.

Flat-rate plans charge a standard monthly fee, regardless of how much electricity you use. Your electricity provider typically looks at your historical usage to determine how much to charge, and that will be your price each month. In some cases, these plans can have limits, however, so if you exceed a specific usage significantly, you’ll be charged for excess fees. Flat-rate plans are ideal for homeowners that use a consistent amount of electricity year-round, with small fluctuations month-to-month. Sense can support flat-rate rate plans in-app to provide cost data.

Time of use plans adjust the cost per kilowatt-hour throughout the day, with most offering cheaper rates late at night when electricity demand is lower and higher rates at times of day when demand is higher. Coupled with real-time usage data, these rates allow utility customers to decrease their energy usage when rates are high and increase usage during off-peak hours (times when energy costs are lower). The new Time of Use feature in the Sense app enables you to enter the different rates to increase the accuracy of your costs in Sense and alert you when you’re using more electricity than normal in your peak rate zones.

Above: Time of use rates in Winter and Summer

Tiered-rate plans are rate plans where a utility or electricity provider designates specific ranges of electricity usage and prices each accordingly. This plan is ideal if you are aware of your typical energy usage and can reliably stay in the less expensive tiers over the course of the billing cycle. Some rate plans may include a combination of both tiered and time-of-use rate plans or change seasonally. These tiered-rate plans and hybrid plans are not currently configurable in the Sense app, but you can use Sense to set a kWh goal for the billing cycle, and Sense will alert you if your electricity usage is trending toward a higher tier.

Above: A tiered-rate energy billing plan.

Across North America, many utility providers offer optional time of use rate plans to their customers. In the state of California, for example, the electrical grid is primarily powered by clean, renewable sources of energy during the day, when residential energy use decreases. Time of use rates aim to get customers to use more energy while demand is low and renewable energy is highest, which reduces strain on the grid. California has mandated that businesses be on time of use rates, and is strongly encouraging homeowners to adopt them.

You can receive notifications from the Sense app throughout the day as electrical rates change. Learn how to enter your time of use rates in the Sense app and find an example here.

Are you moving somewhere with time of use rates or plan to switch to a time of use plan?

With the Sense app, you can run scenarios to figure out if a time of use plan is your best choice.

To see how time of use rate plans impact your latest and historical usage:

1. Find your utility provider’s website and search for service rates or rate plans.

2. For each varying rate, you will need the following information. For an example, click here.
a) The cost per kWh for each of your time of use zones
b) The days and times for which your different rates apply
c) The seasonal differences, if any, for your rate plan

3. Follow the steps here for entering time of use rates into the Sense app.

4. In the Sense app, navigate to ‘Trends > Usage’ and select the time frame.
Note: You can scroll through historical data to see how these rates would have impacted your previous consumption (in aggregate).

5. Once you’ve seen the impact of a specific time of use rate plan, you can remove it from the app. Simply navigate to your rate zones in-app and select delete from the bottom of each rate zone.

6. When you choose the time of use plan that’s right for you and entered it into the Sense app, you’ll get alerts and updates so you’ll see the rate plan’s impact on your bills and continue to assess how it impacts your pocketbook.

For more information about what types of rate plans are enabled in the Sense app with this new feature, check here.
Have a question about the time-of-use feature? Ask the Sense Community.