How time-of-use pricing plan is impacting electric bills

JEFFERSON CITY, Mo. – Depending on where you live in the state, changes are coming to your electric bill.

The Missouri Public Service Commission said it’s an issue of supply and demand, requiring Ameren St. Louis and Evergy in Kansas City to adjust the cost of electricity to match the time period it’s being used. The more demand there is, the higher the cost. On Tuesday, representatives from Evergy reported on the program’s initial results.

“We are almost entirely adopted now, meaning transitioned to time-of-use rates,” Chuck Caisley, Evergy’s chief customer officer, said. “I think over the next week to 10 days we should conclude all the transitioning to time of use rates.”

For the past two months, Evergy has been implementing time-of-use electric rates for all customers on the western side of the state.

“It is enabled by digital meters versus analog meters,” Caisley said. “It is enabled by automation that is digitally created through apps, Wi-Fi, and cellular signals in the home. It is an inherently digital thing.”

If you didn’t select one of the four billing plans offered, you were automatically enrolled in the default time-based plan, which has the lowest price difference between peak and off-peak hours.

“The time-of-use rates that we’re implementing have the consumer at the best interest,” Missouri Public Service Commission Chair Scott Rupp said. “It can give them the opportunity to save money and if you educate yourself, you will end up being better off by picking the plan that is best for you.”

Initially, Evergy would have enrolled customers in the standard peak saver rate, where the price of electricity would spike from $0.09 to $0.38 per kilowatt-hour between the hours of 4 p.m. to 8 p.m. in the summer months. Back in September, Evergy requested to change the default plan to make it closer to the company’s traditional pricing. Days before the mandatory time-of-use pricing went into effect, the commission approved the new plan.

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“The companies are doing this because it’s in their best interest long-term to avoid building plants and you can save the customer money at the same time,” Rupp said. “We’ve been wanting to move this way for years because the technology is given more control in convenience, in choice to consumers, so they have the ability to make choices to save money and spend their dollars on energy more wisely.”

Evergy is offering the four following time-based rate plans:

Default Time-Based Plan

Closest to the current standard residential rate plan. Formerly called the “Peak Reward Save Plan.” This plan has the lowest difference in price between peak and off-peak hours. This rate is not seasonal and applies all year. Customers who are not able to easily shift the time they use energy should consider this rate.

Summer Peak Time-Based Plan

Only has peak pricing during the summer months. Formerly called the “Standard Peak Saver Plan.” Customers who can reduce energy usage during the summer (June-September) peak hours of 4-8 p.m. on weekdays should consider this rate plan. Customers who shift energy usage to off-peak times on weekdays in the summer are rewarded with discounted rates.

Nights and Weekends Plan

Three time periods, and overnight and weekend discounts. Customers will pay a lower price for energy during off-peak times and on weekends. This plan is designed for those who can make a larger effort to shift their energy use to overnight hours or weekends to avoid higher prices during peak times.

Nights and Weekends Max Plan

Three time periods, the largest difference in price. This plan is a whole-home rate plan created with electric vehicle drivers who want to save more on vehicle charging without having an electrician install a second meter.

For more information on the rates and how to save, visit Evergy’s website.

“The purest and best use of time-of-use rates is hopefully to eventually reduce peak energy usages and by extension reduce energy cost and potentially capital expenditures that the company has to make which should in turn, lower customers’ bills,” Missouri Department of Commerce and Insurance Office of Public Counsel John Clizer said.

It’s estimated that roughly 90% of customers will see little change or save annually with time-of-use rates. Evergy Senior Director of Public Affairs Katie McDonald told commissioners Tuesday the company is working on communicating to customers who have electric heat that they have sticker shock when they get their bill in the mail.

“This is the segment that has the greatest chance to be negatively impacted by TOU rates,” McDonald said. “They need to be really focused on their usage and opportunities for behavior changes so we’re going to be communicating with them more frequently during the winter months.”

Of Evergy’s 562,000 customers, Caisley said roughly 30% have chosen their new rate. Of that percentage, nearly a third of those customers are seniors.

“It all went very smoothly,” Caisley told the commission. “It’s now time to go back and focus on the individuals customers again.”

In the presentation, McDonald said the company saw a decline in satisfaction while rolling out time-of-use rates but said it’s starting to hold the study.

“We do feel like there is opportunity for us to see increases in satisfaction as we start to get into a more stabilization period and as customers start to get more familiar with their rates, a lot of them will see that they are not seeing the increases in their bills that are dramatic like they were expecting,” McDonald said. “They are actually seeing the benefit that many will have on these new rates. As we look forward, what we are looking to do is really focus on customer specific rate plan education.”

Ameren is currently in the middle of upgrading its customers to smart meters in order to make the switch. Rupp said the transition to time-of-use rates is expected to happen in the spring.

“It just happened to be that Evergy was kind of a little more innovated, so we were really comfortable in saying, ‘Hey, you’ve had the technology for a while; we need to get it to the customer,’ but Ameren is following up and doing the same thing,” Rupp said.

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In a statement, Ameren said:

Ameren Missouri offers customers with a smart meter a choice of five rate options to best suit their energy needs. Thanks to those smart meters, customers can access their own real-time energy usage information to help weigh the available options and find a rate that’s right for them. Customers who can tailor their energy usage to off-peak hours have the potential to realize additional savings on their monthly bills, while customers who prefer the convenience of a flat rate can keep it. More information about the available rates and ways to save can be found on our website.

If you’re an Ameren customer and your home already has a smart meter, you have a choice of five rate options:

Anytime Users: basic rate where you pay the same rate for all the energy you use. To save on this rate, you’ll have to use less energy. This is the rate that Ameren customers are familiar with,

Evening/Morning Savers: basic rate where customers will pay a discounted rate on the energy used between 9 p.m. and 9 a.m.

Overnight Savers: An advanced rate where the customer pays a discounted rate on the energy used between 10 p.m. and 6 a.m. This is the best option if you’re a night owl or if you own an electric vehicle.

Smart Savers: An advanced rate where customers pay nearly five times as much for on-peak energy usage compared to the off-peak rate.

Ultimate Savers: An advanced rate where customers distribute their energy use throughout the day to avoid on-peak hours when energy is the most expensive.

For more information on the different rate options and ways to save on your energy bill, visit Ameren’s website.

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