From the CEO: Time-of-use rates empower energy consumers

Posted on Jul 02 2024 in Kankakee Valley REMC
Kankakee Valley REMC CEO Scott Sears

As you drive past the gas station on your way to work, you spot the great price for regular unleaded. You are a little tight on time this morning, so you make a mental note to fill your tank on the way home. But as you pull into the station eight hours later, you are stunned to see that the price has jumped by 30 cents a gallon.

We are all accustomed to ever-changing prices for gasoline. They jump up quickly, often without warning, but they never seem to fall as quickly, do they? Everything from an upcoming holiday weekend to distant country’s disputes, to a problem at some refinery can send the price soaring. Other commodity markets like grains, livestock, and building materials behave similarly.

Did you know the energy that WVPA purchases on your behalf is also a commodity and thus subject to price fluctuations based on various factors?

The wholesale electric market is highly dynamic, driven by the fundamental economic principle of supply and demand. For instance, during peak periods, such as at 5 p.m. when families return home from work, the demand for electricity surges, causing market rates to rise accordingly. Conversely, when demand decreases, prices fall. Many factors influence the price of electricity in the market, such as power generation availability, weather and natural disasters, supply chain issues, transmission grid issues, and world events.

Historically, utilities billed customers at a flat rate for energy consumption, regardless of the day or time. This is how your co-op currently bills you. While these straightforward rates shield customers from market price fluctuations, they do not offer a way to save money. However, with the advent of advanced metering and meter data management systems, variable pricing based on different times and days, known as Time-of-Use (TOU) rates, is becoming more accessible. TOU rates account for higher energy costs during peak times and lower costs during off-peak times. This system empowers consumers to reduce their utility bills by choosing when to use energy.

KVREMC currently offers Time-of-Use rates for your benefit. Please call our office at 800-552-2622 to make the switch now and start saving money.