Time-of-use rates are meant to incentivize customers to use more energy during daylight hours when solar resources are more abundant. Utilities charge higher rates for electricity during the evening and overnight, and lower rates during the day.
It's a chance for customers with flexibility to save on their monthly bill by shifting their energy habits — assuming customers know they are on time-of-use rates to begin with.
"I didn't even know I was part of the test group, so I had no wherewithal to adjust my energy usage,” said Waialua resident Colin Steinberger. He's one of about 16,000 Hawaiian Electric customers on Hawaiʻi Island and Oʻahu who were randomly enrolled in its time-of-use pilot program, called Shift and Save, in February.
Steinberger said he missed the original email HECO sent out informing him of his enrollment. He learned he was on the experimental rate structure just a few weeks ago, when another email from HECO informed him that bill protection for the program was ending.
For the first six months of the program, HECO placed a $10 cap on any increases in enrolled customers' electricity bills, which insulated participants as they adjusted to the new rate structure.
Now that the program has reached the halfway mark, the training wheels are coming off. Starting in August, customers like Steinberger will be charged the full amount for any electricity they use.
Steinberger suspects he's not the only one who has unwittingly been on time-of-use rates, and he wonders if the program has prompted any actual changes in people's behavior.
That's one of the main questions HECO will try to answer with a full analysis of the first six months of Shift and Save. The utility is expected to complete its report by November.
In the meantime, Michael Angelo, the head of the Division of Consumer Advocacy, said customers like Steinberger have to figure out for themselves if time-of-use makes sense for their household.
Angelo suggested that time-of-use rates could benefit retirees or people who work from home and are able to run energy-intensive appliances, like laundry machines and dishwashers, during the day. But he added that customers who work a typical 9-to-5 may have a harder time adjusting their energy usage to take advantage of lower daytime rates.
The Division of Consumer Advocacy has been involved throughout the development of Shift and Save. Angelo said one of his office's "big concerns" about the program is how it may affect people who are financially constrained and on set work schedules.
"If [time-of-use] is overly impacting certain classes of customers, that's certainly something that we would want to have addressed," Angelo said.
If Shift and Save rolls out for all HECO customers, which could happen as soon as 2025, Angelo said his office would advocate for the program to have an "opt-out" option, so that customers who are limited in their ability to change their energy habits don't get saddled with higher rates during peak evening hours.
"From an economics perspective, it is good to have prices that reflect the actual cost or price of the cost of electricity, to the extent that the rates are designed to reflect that," Angelo said. "But ultimately, from our office's perspective, having an option available for customers to best match what meets their needs is okay."
Hawaiian Electric has a calculator available in its customer portal that allows people to see how much their monthly electricity bill would be if they used energy at different times of day under Shift and Save's tiered rates.
When Angelo plugged in his current energy usage into the calculator, he saw his bill jump up by about $20 under the time-of-use rates. When he shifted about 20% of his energy usage from the evening to daytime hours, he saved around $10. Angelo cautioned that everyone's expenses and savings may be different and urged customers to try out the calculator for themselves.
If customers in the Shift and Save pilot program have concerns about their bill, they can opt-out at anytime. Despite Steinberger's initial surprise at learning he was on time-of-use rates, he's sticking with the program for now. He's seen his energy bill dip in the last few months, and he wants to see if he can keep that streak going.
