Electricity will cost more during peak hours

Soon, customers will find that electric rates operate under a similar principle. Evergy will charge more to power air conditioners and appliances during peak hours and offer lower rates during the morning, evening and weekend.

“The concept of variable pricing isn’t foreign in other sectors,” said Geoff Marke, chief economist with the Missouri Office of the Public Counsel. “If you’re old enough to remember, phones used to operate this way. If you dialed at different hours the pricing would change.”

The Public Counsel is a state office that represents the interests of consumers in utility rate cases. Earlier this year, the Missouri Public Service Commission, which regulates investor-owned utilities, mandated that Evergy switch to Time of Use rates for all of its residential customers.

Starting on Oct. 1, all Evergy customers will switch to time-based plans that charge higher rates during peak hours, primarily 4 to 8 p.m. on weekdays. Rates are lower overnight, earlier in the day, on weekends or in the winter.

“The main advice I have for customers is they really need to pay attention to that 4 to 8 p.m. time period,” said John Coffman, an attorney with the Consumers Council of Missouri. “It seems unfair that it’s foisted on all customers. We think customers should have an option.”

Evergy introduced an optional time-based plan in 2019, but customers will not have a choice of staying on fixed rates after the switch on Oct. 1. The company will offer four different plans. Customers who don’t choose one automatically move to a default plan called Standard Peak Saver.

The standard plan charges 32 cents per kilowatt hour from 4 to 8 p.m. in the summer months. At other times of the day, the rate drops to 8 to 9 cents per kilowatt hour, depending on the time of year. By contrast, today the standard rate for a kilowatt hour is 14 cents.

“The early analysis shows that if customers did nothing, 70% of people that transition to the default rate save money,” said Kelli Kolich, a spokeswoman for Evergy. “Otherwise some customers may need to be a little more conscientious about their usage and modify those behaviors so they can save on bills.”

That means using fewer energy-intensive appliances — washers, driers and especially air conditioners — during those 4 to 8 p.m. peak times. Evergy’s other plans offer variations but generally stick with the higher rates during peak summer periods. One plan, called the Nights & Weekends Max Saver, offers an especially cheap rate from midnight to 6 a.m. for people who want to charge an electric vehicle overnight. Another plan uses extra charges or credits depending on peak usage times.

The PSC is moving to get all investor-owned utilities switched to time-based rates to reduce consumption during the peak times when power is more expensive to deliver.

“There’s cheaper times to consume electricity and there’s cheaper times to produce electricity,” Kolich said. “Time-based rates can allow utilities to lower costs by reducing the amount of energy that we generate and purchase.”

Marke, with the Office of Public Counsel, said the payoff would come in future years if Evergy or another utility company doesn’t have to build additional generating plants. “Those are real costs that eventually get passed on to the customer,” he said. “The cost of electricity is going up.”

For consumers, time-based rates make it more important to become an informed user of electricity. Marke said a pilot program showed that a majority of customers were able to benefit from time-based rates, but he’s worried about the impact on people who use space heaters in the winter months.

“I imagine there are some skeptics out there,” he said. “We like the idea of change in theory but in practice, it’s a lot more difficult.”

More information on Evergy’s time-based plans is available at evergy.com/myplan.