Why your electricity bill might change depending on the time of day
In short: Most people assume electricity costs the same regardless of when they use it. However, new billing structures like time-of-use rates mean that running your dishwasher at 6:00 PM could cost significantly more than running it at midnight. Understanding these hidden tiers is the key to lowering your monthly costs.
Electricity billing typically follows one of three main structures. The most frequent model is a fixed rate per kilowatt hour, where a consistent price is applied to all energy consumed. However, some utilities employ 'peak pricing' or demand charges. This less common method calculates costs based on the highest amount of electricity used during a specific 15-minute window within a month.
A more prevalent alternative is the 'time of use' structure. In this system, rates fluctuate based on grid-wide demand. When energy needs spike—typically during evening hours like dinnertime—the cost per unit rises. To manage these costs, experts like Ross Trethewey suggest categorizing household appliances into three distinct groups to identify where you can shift your energy consumption.
The first group consists of 'no control' devices, such as refrigerators or well pumps, which must run continuously. The second group includes 'some control' devices, like HVAC systems, which can be adjusted with temperature setbacks to avoid high-demand periods. Finally, 'full control' devices, such as dishwashers or electric vehicle chargers, can be programmed to run entirely during low-demand hours.
Beyond managing peak hours, homeowners should remain vigilant against 'phantom power.' This refers to the electricity consumed by devices like printers, microwaves, and clocks even when they are ostensibly turned off. A practical way to mitigate this drain is by using power strips and ensuring they are switched off when the connected appliances are not in use.
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Sources
- Summary by Intellect · source: How To Understand Electricity Bills | Ask This Old House
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