(WXYZ) — More than 2 million DTE Energy customers are about to see their rates change to a "Time of Day Rate." It's part of an effort to lower peaks in demand, and help customers manage their energy use.
The new Time of Day Rate rolls out in March, and your energy use in off-peak hours will cost you less than what the base rate is now. But, electricity during peak hours in the summertime will cost you more.
“Why was this rate change needed?" I asked DTE's Chief Customer Officer Angie Pizzuti.
"So, the rate change is really about giving customers choice and the ability to shift and save some of their usage in order to take advantage of lower rates," she said.
She also explained the move aims to help spread electricity use throughout the day and flatten peak in demand.
Peak Hour Rates will be from 3 p.m. to 7 p.m., Monday through Friday, with two different rates during the year.
From October through May, it will be 16.75 cents per kilowatt hour. Then from June through September, the rate jumps to 20.98 cents per kilowatt hour.
Off-Peak Hour Rates will be 15.45 cents per kilowatt hour. That covers weekdays before 3 p.m. and after 7 p.m., plus weekends.
“Do customers have a choice in switching over to this?” I asked.
"This rate is going to be applied to all customers. It is at the direction of the Michigan Public Service Commission," Pizzuti said.
The Michigan Public Service Commission released a statement saying in part, "The goal of time-based pricing is to align utility rates with the actual costs of producing it at different times, in a revenue-neutral way (the utilities will not make additional profit off these rates), with the aim of reducing overall peak demand."
Consumers Energy rolled out a similar change in 2021.
How can you save money?
Shift chores to off-peak hours. From vacuuming to washing and drying clothes, it'll make a difference.
In the summer, pre-cool your home before peak hours. Set the thermostat 3 degrees below your preferred temperature around noon. Then at 3 p.m., set it 3 degrees above your preferred temperature to keep the A/C from running too much. Then, turn it back down after 7 p.m.
You can also invest in a programmable thermostat to make this a breeze.
Other tips? Insulate windows and doors, take the cooking to your grill outdoors if possible, buy energy-efficient smart-home products, replace filters every three months, and use LED light bulbs.
DTE recommends you download the DTE Insight app where you can take a look at your energy use in real time.
A company spokesperson said DTE does have two other base-rate options – "Time of Day 11 a.m. to 7 p.m." and "Dynamic Peak Pricing" which cover roughly 200,000-300,000 customers.
Those customers' rates will not change.
But, again, for the more than 2 million DTE customers on the standard base rate, they'll switch to "Time of Day 3 p.m. to 7 p.m. Rate" as their new standard base rate in March.
