Time Of Use
Time Of Use Billing 101
Advanced Metering Infrastructure (AMI) is installed in the city limits of Tullahoma. To give you a brief background, in the past, TVA and TUA have charged a flat rate for each kilowatt hour of electricity used by distributors and the end-user (i.e., you). The rate was the same regardless of what time of day the energy was generated or how high the demand was for electricity; however, that is no longer the way energy is charged. ‘Time of Use’ (TOU) allows TVA to match pricing with the actual cost of producing electricity during a given time period. As demand for electricity increases, so does the cost of producing it. Electricity costs are higher during ‘peak demand periods’, which are typically hot summer afternoons and cold winter mornings. It is more expensive for TVA to meet these ‘peak periods.' TVA bills TUA at higher rates during peak periods and less during non-peak periods. TUA uses this same rate structure in billing our customers. It helps TUA determine how much electricity is being used at any given moment.
This technology allows both electric and water meters to act as a two-way communication device. This information also allows customers to make decisions about their power consumption. Customers can choose to take advantage of the TOU rate structure and can use less expensive power during off-peak periods to lower their bills by altering their electricity consumption.
Furthermore, customers can use their personal computers and smart phones to view their electric and water consumption in ‘real’ time. Customers will be able to operate electrical items and see their usage, then turn items off and see the consumption decrease almost immediately. This communication will also be beneficial to TUA by notifying personnel of power outages, load demands, and water leak monitoring.
Under the TOU rate structure, TUA has two rates; one for on-peak usage and one for off-peak usage. The on-peak rate is a little higher than the old flat-rate, but the off-peak rate is lower. TVA and TUA have defined ‘peak periods’ as Monday-Friday 1 p.m. to 7 p.m. in the summer months (June, July, August, & September) and Monday-Friday 4 a.m. to 10 a.m. in the winter months (December, January, February, & March). All other times are considered ‘off-peak’ and will be the lower rate. By monitoring when energy is consumed and choosing to delay higher energy using activities, customers can save as much as 10% during these peak months.