It’s an unavoidable fact of the electric industry: power costs much more during peak times when demand on the grid is at its highest. It’s a simple matter of supply and demand.
Electricity is generated in real-time, and the amount of electricity generated has to match the amount of electricity consumed. When demand for electricity is high, the electric grid has to work harder to supply enough electricity to meet the demand – even if it requires the use of more costly sources of generation. This can lead to higher electricity prices, particularly during peak usage hours, which are typically in the late afternoon and early evening.
In the past, when we were limited by metering technology, we had to make our per-kWh rates higher for everyone to ensure we collected enough revenue to cover power costs incurred by those with high demand during peak times.
But now, using modern meters and rate designs, we are able to consistently reward those on our default Peak Savers rate who spread out their usage during peak time from 3 to 8 p.m. on declared Peak Days. That reward comes in the form of a lower peak charge. Incorporating timing into our electric rates helps ensure fairness among all members.