Electric utilities have used time-varying rates for nearly 50 years as a way to incentivize demand reduction during peak hours when power costs are at their highest. 

Time of Use (TOU) rates offer the benefit of engaging consumers in the real cost of energy as generation and transmission costs fluctuate throughout the day, and bring flexibility to the demand management portfolio. While the adoption of TOU programs over the years has been sporadic, the recent surge in demand for electricity coupled with the related increase in energy prices has found renewed interest in using variable pricing to improve demand flexibility.

Some utilities are now taking advantage of advanced metering data and customer-side software programs to reinvent the TOU program and make it the standard rate for their customers.  PSEG Long Island was recently recognized with an award from the Smart Energy Consumer Collaborative (SECC) for transitioning over 900,000 customers to its Time of Day rate program.  

The utility first rolled out the new rate structure as an opt-in program in 2021. After the program exceeded initial expectations for customer interest and energy savings, PSEG Long Island became the first utility in the Northeast to adopt a slightly redesigned Time of Day rate as its standard residential rate. 

Landis+Gyr’s Gridstream® AMI and MDMS systems provide PSEG Long Island with the interval billing data necessary to model and bill complex rates, calculate rate comparisons and shadow billing, as well as feed customer communication platforms, allowing energy users to monitor their usage during peak rate hours, enabling beneficial behavior change that benefits the vast majority of program participants. 

Fast forward to 2026 and program participation has skyrocketed from the initial 15,000 opt-in customers to over 900,000 participants. And so far, the utility is seeing positive results with the average customer shifting approximately 1.3 percent of their load to lower rate periods on the average summer day. These results scale to larger MW load reductions on the hottest days of the summer. 

According to research from the Smart Energy Consumer Collaborative, 66 percent of electric utility customers surveyed say they would consider enrolling in a behavioral demand response program, provided they have the information needed to judge the benefits to their bottom line. 

For residential customers, time-based rates are often offered in conjunction with other demand management programs, such as appliance load control or smart thermostat setbacks to help consumers avoid higher costs during peak. 

PSEG Long Island is offering appliance disaggregation tools that include a personalized portal and monthly emails that illustrate which appliances contribute most to peak power costs and provide guidance on shifting load out of that period.

In the current period of rising energy demand, utilities more than ever need solutions for demand management that protect infrastructure while maintaining power quality and uninterrupted service. Landis+Gyr’s next generation grid edge technology is focused on addressing demand flexibility concerns for utilities and consumers, with options to automate load shifting and reduction in real time to improve performance and customer satisfaction.

Check out Landis+Gyr’s grid flexibility solution here.