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The Basics of Time-Variant Pricing

October 17, 2019 | Blog

Time-variant pricing adjusts the cost of electricity to specific demand at certain times of day and days of the week. In the past, electricity bills were calculated on a flat rate.  In a time-variant schedule, however, power produced during daily periods of routinely high demand—and special periods of extremely high consumption —is more expensive, while power generated in low-demand periods is a bargain.

Customers of utilities that offer time-variant plans are now “empowered” to synchronize habits of electrical consumption to lower-priced periods and thus reap substantial savings, as well as take steps to increase overall energy efficiency in their home.

In a time-variant schedule, electricity pricing is divided into three levels:

  • Peak pricing occurs roughly from late morning into early evening and imposes the highest cost per watt-hour of power.
  • Off-peak prices are discounted and occur at night (typically after 8 p.m.) and usually all day and all night over weekends.
  • Critical peak pricing occurs when special events such as a heat wave strike. This is the most costly electricity, though limited to duration of the event that triggers the price increase.

Where time-variant pricing is available, consumers can take advantage of savings by taking measures like these:

  • In cooling season, program higher temperatures on your programmable thermostat during the utility’s daily specified peak period. Schedule lower temperatures at night as soon as the lower, off-peak prices take efect.
  • Reschedule power-intensive activities, such as running household appliances like the clothes dryer or the dishwasher, to take advantage of off-peak hours at night or on weekends.
  • If critical peak conditions take effect, respond by temporarily setting higher A/C thermostat settings for the duration of the event. Utilize alternative methods such as opening windows and running efficient ceiling fans to reduce power consumption as much as possible.  Many utilities will exempt customers from the extra-high critical peak rates if they keep power usage below a specified minimum.

For more ways to benefit from time-variant pricing in your home, contact the HVAC professionals at CCAC.

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