PSE's new time-of-day rates are voluntary

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An estimated 300,000 Puget Sound Energy customers will automatically be put on time-of-use power rates May 1 unless they contact the company to opt out of the program.

The new rates were approved yesterday by the Washington Utilities and Transportation Commission and will be in effect through Sept. 30. Peak rates would be 15 percent higher than current prices, and off-peak rates would 15 percent cheaper. Midday prices would be the same.

The time-of-use rates :: 6.25 cents per kilowatt hour from 6 to 10 a.m. and 5 to 9 p.m., the peak hours of use. :: 5.36 cents during midday, from 10 a.m. to 5 p.m. :: 4.7 cents from 9 p.m. to 6 a.m. and all day Sunday and holidays, off-peak hours of use.

The time-of-use rates are new to the region, but not the country. At least a dozen other utilities use some form of time-of-use pricing.

Utilities use the programs to save money by encouraging customers to use power at off-peak hours, when it is less expensive to supply. If successful, the programs can help delay construction of new power plants, because power grids are built to meet peak loads.

Shifting peak loads also enhances the reliability of supply, and can bring down rates for purchases on the wholesale spot market. The June bill will be the first to reflect new rates.

The state commission also approved a second program, under which Puget Sound Energy will pay residential and business customers a credit of 5 cents for every kilowatt-hour they save beyond a 10 percent cutback in electricity use from the same month last year.

Puget Sound Energy and state regulators will review the time-of-use program at the end of the trial period to determine whether to continue or expand it.

Puget originally wanted to make the program mandatory for all customers, and sought a greater spread between the cheapest and highest rates. Consumer advocates objected, saying the program would gouge customers and make a bundle for Puget.

Puget predicts most customers in its service area, which stretches from Whatcom to Thurston counties, won't see much change in their bills, even if they make no change in their energy-use patterns. Puget claims its customers, on average, use nearly half of their electricity in off-peak hours, when appliances such as refrigerators continue to run.

"This program is not a stick to penalize customers," Gary Swofford, Puget's vice president and chief operating officer, said in a prepared statement. "If a lot of customers just do small things, like running their dishwashers after 9 o'clock at night or doing their laundry on Sunday, they'll not only lower their personal bills, but they'll help to limit the amount of high-cost power we buy on the wholesale market."

The rebate program and time-of-use pricing are intended to reduce overall consumption and shift loads to off-peak times. "We see this as the beginning of a new era in energy conservation," Swofford said.

Lynda V. Mapes can be reached at 206-464-2736 or lmapes@seattletimes.com.