Tariff News

About Electricity Tariffs

By

| Reading time 3 minutes

Electricity tariffs are the contract between a utility and its customers.  In the past selecting your electricity tariff was like choosing the color of your Model T, there was no choice.  That’s changing as Utility Commissions push the utilities to provide consumers with choices.  In deregulated markets, non-utility electric suppliers are offering an enormous variety of plans with more complexity.  Increasingly an electricity tariff can have all the complexity you would find in a cell phone plan.

Like cell phone plans, there are a number of different components. The simplest electricity tariffs consist of simply a base charge and consumption charges, like this one from the Knoxville Utility Board.

  • Basic Service                    $10.00

  • Energy Charges               8.529¢/kWh

From this starting point, the utilities start to add complexity.  The first change to rate structures is usually adjusting the price by season.  Increased demand for electricity in the summer due to air conditioning is converted into higher prices in the summer.  Similarly, utilities will often charge different per kWh rates above and below certain consumption threshholds. The default tariff for Georgia Power has both features:

  • Basic Service Charge        $9

  • Winter Energy Charges (Oct - May)

  1. 0 - 650 kWh                        5.0633¢/kWh

  2. 651 - 1000 kWh                 4.3443¢/kWh

  3. Over 1000 kWh                 4.2670¢/kWh

  • Summer Energy Charges (Jun - Sep)
  1. 0 - 650 kWh                        5.0633¢/kWh

  2. 651 - 1000 kWh                 8.4166¢/kWh

  3. Over 1000 kWh                 8.6701¢/kWh

Yet more complex are the time-of-use rates that are being added by utilities all over the U.S. as they roll out smart meters.  With these rates, the price of electricity changes according the to the hour of the day and the day of the week.  These are usually used in concert with seasons to create rates that vary dramatically throughout the year, like in this time-of-use tariff from Nevada Power:

  • Basic Service Charge         $9

  • Base Energy Rate               5.215¢/kWh

  • Summer Rates (Jun - Sep)

  1. On-Peak (1 PM - 7PM)    24.873¢/kWh

  2. Off-Peak                                2.818¢/kWh

  • Winter Rate                          1.616¢/kWh

Lastly, there’s one more charge type that’s rarely used for residential electricity tariffs but is a cornerstone of electricity tariffs for businesses; the demand charge.  The demand charge measures peak usage and is discussed in more detail here.  To end this post, I’ll leave you with a tariff that includes demand charges, time-of-use and seasons from Arizona Public Service:

  • Basic Service Charge          $0.21/Day

  • Metering                                $0.17/Day

  • Meter Reading                     $0.06/Day

  • Billing                                    $0.06/Day

Delivery Charges

  • Summer  (May - Oct) w/ On-Peak (9 AM- 9PM)
  1. Demand                                 $3.38/kW

  2. On-Peak Consumption      1.125¢/kWh

  • Winter On-Peak (Nov - Apr) w/ On-Peak (9AM-9PM)
  1. Demand                                 $1.85/kW

  2. On-Peak Consumption      1.38¢/kWh

Generation Charges

  • Summer  (May - Oct) w/ On-Peak (9 AM- 9PM)
  1. Demand                                 $8.49/kW

  2. On-Peak Consumption      6.003¢/kWh

  3. Off-Peak Consumption      2.034¢/kWh

  • Winter On-Peak (Nov - Apr) w/ On-Peak (9AM-9PM)
  1. Demand                                 $6.30/kW

  2. On-Peak Consumption      3.065¢/kWh

  3. Off-Peak Consumption      1.699¢/kWh

As you can see there are a lot of factors that need to be considered in order to select the best electricity tariff for an individual circumstances.  That’s why we provide all of this data through an easy to use RESTful API. Beats the heck out of having to read documents like this 477 page PDF from Commonwealth Edison.  Leave that to us.

Also in Tariff News

The Profound Impact of Electricity Rate Design

By Robb Miller | May 14, 2011

John Farrell at Renewable Energy World reported last month that Distributed Solar is nearing ‘Grid Parity’. His main point is that installed Solar Photovoltaics are very close to being cost competitive with grid power in numerous areas...

Genability Covers the Majority of US Residential Electricity Rates

By John Tucker | Mar 31, 2011

You could not describe a more perfect San Francisco spring day than the one we’re having today.  Bright and sunny, in the mid-80s – it’s perfect for Opening Day.  After 6 weeks of practice in the desert,...

Peakshaving through a Heat Wave

By Robb Miller | Jul 27, 2011

In parts of New England, wholesale spot prices for electricity hit $560 per megawatt hour on friday, 10 times annual average prices. The PJM Interconnection announced that it set a new record for Peak Power Use by...

New Year, New Rates - The Evolution of Electricity Rate Pricing

By John Tucker | Jan 3, 2012

A brand new year means new rates! We’ve been spending the time around the holidays working hard to get all the rate changes into our database in time for the January 1, 2012 effective date. Over 1000...