The default rate structure for a typical household is “Single Phase Residential Service.” This is a three-part rate, meaning that your bill is made up of three components:

Electric service charge — a flat fee which recovers the cost to deliver service to your residence, regardless of how much electricity you use.

Energy charge — the total amount of electricity used is 13.128 cents for each kilowatt-hour (kWh). This is adjusted up or down each month to match the market price of electricity through the power cost adjustment.

Demand charge — this is the first year to bill for this component for residential members. This charge is based on the amount of electricity your home draws at any given time. Members are billed monthly for the 15-minute period your usage is the highest.

Compare your demand for electricity to thirst. If you aren’t terribly thirsty, you can get a taste of your drink through a little red plastic stir stick. A more normal drink comes through the drinking straw at a restaurant, and if you are exceptionally thirsty, you may opt to forego a straw altogether and pour the liquid directly down your throat. Your demand for water is the amount you want to take in at once, and the same is true for electrical demand.

The electrical grid must be built to provide enough electricity to all members at all times, especially when the demand is greatest, so that no one loses power. The demand charge provides a price signal to assess each member the cost of building and maintaining the system at a size proportional to their usage.

How is Time-of-Use (TOU) different?

Time-of-Use rates have an Electric Service Charge almost identical to Single Phase Residential Service. After all, the poles and lines and overhead expenses are the same.

TOU does not have a demand component. Instead, there are two different energy charges assessed for peak vs. off-peak hours of the day. In 2025, the off-peak charge is 11 cents/kWh, and the peak charge is 30 cents/kWh. Both are adjusted to match the market price for electricity through the power cost adjustment.

The peak hours are determined by our power providers. Although they do vary as usage patterns evolve, they are currently 3-6 p.m., Monday through Friday. That’s when power costs the most because the demand for electricity is highest. The entire grid, and especially power generation, must be built to serve the highest demand. A price signal during peak hours encourages the conservation needed to preserve the integrity of the grid. Please note that there are no peak hours on weekends or major holidays.

Is the Time-of-Use Rate Best for You?

Every household, and each person living there, uses energy in a unique way. If you have household members who use most of their electricity from 3-6 p.m., and you know they would be unable, or unwilling to adjust, the TOU rate may not be for you. You may pay more on your monthly bill.

However, if you are rarely home from 3-6 p.m. on weekdays, and have a programmable thermostat to reduce the use of the HVAC system during those hours, you may see significant savings.

To get a general idea of your usage patterns, use the SmartHub app. If you want a more exact calculation, call the office at 800-794-1989 and a member services representative can prepare a report, which shows the variable portions of your electric bill using your actual 2025 data to compare the cost of the two rates. If your monthly demand charges are regularly above the average of 11 kWh, it is worth a look.