What Did I Learn When I Benchmarked My Electric Rate?

More and more utilities are offering rate optimization tools on their websites that allow customers to pick the best rate for them. The tool requires the customer to have 12 months of usage data. Then it does the number crunching for the customer. Of course, it assumes that the customer’s usage history is adequately captured by the past 12 months. The past 12 months may have been unusually hot or cold, or the customer may have had lifestyle changes. It also assumes the next 12 months will be the same as the past 12. In other words, it works with a frozen load shape. 

As far as I know, and I could be wrong, none of the existing tools have the ability to adjust for any of those factors. 

Even then, it’s a very useful tool. I have been using it for years. But I am amazed how many customers (a) don’t even know the tool exists, or (b) don’t know how to use it, or (c) can’t find the time to run it.[1] 

But what the tool does not do is compare your “best” rate with rates offered by other utilities. While advising utilities, regulators, governments and legislators on rate design issues over four decades throughout North America and in Latin America, Africa, Asia, Australia and Europe, I had come to know that my rate was higher than those being offered anywhere else in the US, with the exception of San Diego and Hawaii.  

As my retirement approached, I began to pay more attention to how much I spent on electricity. During the 2019-2021 period, I was working on rate design cases in Arizona, Colorado, Georgia, Missouri, Montana, Texas and Washington in the US and in Alberta, British Columbia, New Brunswick and Nova Scotia in Canada. 

I was amazed to find that I was paying so much more for the same kilowatt hour of electricity than customers being served by any of the utilities in those 11 jurisdictions. I would often mention my rates to my clients. They were all shocked. Then, just about all of them would, with a smile, invite me to relocate to their jurisdictions.

 

Comparing TOU rates

Well, I finally sat down last week and checked the rates being offered in a few other jurisdictions during the summer season. Then I plotted the numbers. My point of reference was the three-period TOU rate that I am on, PG&E’s EV2-A rate. I compared it with TOU rates being offered by other utilities.  

In the graph, my rate ends up at the top, but this is not a race where the prize goes to the utility whose rate tops all the others. 

​The EV2-A rate which I am on is, as far as I know, only available for EV drivers. It has been climbing rapidly since I signed on to it in 2019, when it was just 17 cents/kWh. It has risen by 65% in just four years.

The default TOU rate being offered by PG&E has only two pricing periods (E-TOU-C). It’s second from the top in the graph, not much of a consolation for the millions on that rate. Within the continental US, only SDG&E has higher rates. In the US, I believe Hawaiian Electric has the highest rate and thus the highest percentage of customers with solar panels on their roof (which, of course, elicits the Pavlovian response from those who oppose rooftop solar panels: solar customers are creating a cost shift which drives rates upwards for everyone else).

 

Where should I charge my EV?

Then I did another comparison. I bought a Tesla Model 3 in June 2019, to replace my 2005 Porsche Boxster.[2] I chose the grey color because it came the closes to matching the color of the Boxster.

Sporty as that car was, the Boxster had become expensive to maintain. What pushed me over the edge was that the cloud of black smoke that it would emit when I started it in the morning. It was the kind of image you would associate with the Batmobile.

I decided to benchmark my rate with what I would pay at home for charging my EV with what I would pay at a Tesla Supercharger.

At home, I use a Level 2 charger. I always charge the car during the off-peak period (unless it’s an emergency).

Once in a while, I go to a Supercharger. There are several within 15 miles of my house, with varying charging speeds and availability and thus, varying prices. Tesla, being a smart and successful retailer, which dominates the EV landscape, seems to be basing prices both on cost (kW demand) and “the price elasticity of demand” and convenience.

Here’s the benchmarking graph, almost equally depressing for me. I charge mostly at home for convenience, not for loyalty, and also because Tesla encourages L2 charging with AC power.

There's a total of 15 Tesla observations, drawn from Superchargers that are within a one-hour driving radius from my house. Tesla 1 is the one nearest my house and also the one with the best rates. Most of the time, it costs less, and often far less, to charge their than at home.

​

By the way, I have seen EVs being charged at all these Superchargers during the peak period. Most people either (a) don’t know that charging prices vary by time of day (they are not displayed at the charger but the driver can view them on the screen by going to Google maps and clicking on the icon for that specific Supercharger) or (b) they just don’t care or (c) they are in a rush or (d) they are on a long trip. 

 

Postscript

So, what did I do to manage my skyrocketing monthly electric bills? I can’t change my rate (and, yes, I know it’s going up yet again on the 1st of January by 13%). I don’t intend to relocate, despite the strong temptation that arises when I view their lower electric rates, which are often accompanied by lower rates of sales and income taxes. But I am not moving -- most of my close friends and relatives live here.

Thus, I did what more than a million customers in California have done. I installed solar panels on my roof and also paired them with a battery, for resilience.[3]

My monthly bill averaged $200 a month in 2019, before solar. Had I not installed solar panels on my roof in December 2019, it would have risen to $340 a month by now and shot up to $384 next year (with the 13% rate hike).[4] With solar, the bill averages out to $60 a month.