Aggressive Mechanical, Inc

Time-Variant Pricing: How Much Comfort Costs Throughout the Day

28 Aug
Time-Variant Pricing: How Much Comfort Costs Throughout the Day

If you’re used to paying a flat rate per kilowatt hour (kWh) on your electric bill, you may not realize that the costs of producing electricity vary throughout the day. Electricity suppliers know this, and some are now offering time-variant pricing that reflects cost fluctuations, which are often related to:

Critical peaks. During a heat wave, when everyone fires up their air conditioner at the same time, electrical production costs rise, because power plants with higher operating costs have to come online.

Demand periods. On an average day, consumption is higher or lower during certain periods. Typically, it drops at night, and peaks at the end of the workday.

Time-Variant Pricing Basics

The goal of an electric supplier offering varying prices based on production costs and demand is to lower their overall expenses and pass savings on to homeowners who adjust their usage to match. Here are some of the most common time-variant pricing methods being implemented:

Time-of-use. Suppliers break the day down into different pricing time frames, such as peak, interim and off-peak periods. The prices differ by period, but stay the same from day to day.

Variable peak. The day is broken down into the same multiple pricing periods as with time-of-use, but with a difference. For one period, the price is adjusted daily based on system conditions and the supplier’s costs.

Critical peak rebate. A supplier offers customers a rebate for cutting back on the amount of electricity they normally use during a specific daily period.

Ways to Take Advantage of Time-Variant Pricing

If your electric company offers one or more alternatives for time-variant pricing, there are lots of ways to take advantage and reduce your household energy bills, such as:

  • Adjusting your programmable thermostat schedule to match their pricing periods.
  • Raising your usual temperature setting a few degrees during peak demand/rebate periods.
  • Changing your usage habits, for example, running the clothes dryer or dishwasher only during off-peak periods.

If you have questions about time-variant pricing or HVAC-related issues that are affecting the electric bills in your Monmouth County home, contact us today at Aggressive Mechanical Contractors.

Our goal is to help educate our customers in Monmouth County, New Jersey and surrounding areas about energy and home comfort issues (specific to HVAC systems).  

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