Update: Use this plan to mine bitcoin or other cryptocurrencies.
Beware: sharp spikes
This billing scheme is covered with sharp spikes. It'll be practically impossible for average consumers to comply with the rules, because even if you're really trying, one misstep in a month can spike your bill $35 or $70. "for no conceivable reason". Only consider this type of billing if you have automatic systems which force you to comply with the plan's rules.
It's yet another dodgy way to package energy costs
In the last decade you've probably been flooded with offers to change how you buy electric or gas. (partly because of deregulation. One common scheme with gas was to "fix" your rate "to protect you from gas company increases" - actually fracking was pulling gas prices down. Those companies made a mint.
All these plans are gambling. (in fairness, so is staying put). But this you know: They wouldn't be offering these plans unless their expert industry opinion was they'd make more money if they do. Since it's a zero-sum game, that means you lose. And indeed, they often pay hefty commissions to salespeople, with door-to-door salespeople making $0/hr and $200/sale.
Historically most people pay 8 to 15 cents per kwh per power. In this deal, you pay an exorbitant monthly rate for your peak use for the month ($6.64 per kw); then electricity is practically free (1c/kwh) all hours except summer/fall weekday air conditioning times (10c/kwh). They are betting your usage is spiky. You are betting your usage is flat. But they have all your smart-meter data. You don't.
The business rationalization for this plan is it charges you for the "thickness of the wire" needed to deliver to your home. But wait. The service lateral is already plenty big, and they're not going to downgrade you to #8 and upgrade you to #6 or #4 if you pay enough peak charges. If this applied to neighborhoods, wouldn't it only apply at times neighborhoods normally have peaks? How does it hurt the grid if you blast dryer, EV charger and on-demand shower at midnight when the neighborhood pipe is wildly underused, and the nuke plant is giving power away? Why should that define your peak? This rationalization simply makes no sense.
The only way you can win under this plan is to become a master of your energy usage, particularly your peaking. If you can master your household peaking, it's a very good deal. But people are awful at that. You can't rally a modern family to be that conscientious. It's totally impractical and the industry knows that. That's the scam. You get a $300 energy bill and the stage is set for them to flip it around and make it your fault.
Plans like this are common for commercial power delivery, but business/government have a Facilities department whose job is to manage onsite power consumption and contain costs. Families do not.
A 2790 watt dryer does not exist
Gas dryers take around 500 watts give or take, just for the drum and fan. Electric dryers on a 30A circuit (7200 watts) are allowed a maximum of 80% (5760W) so they try to run near the max, or about 5500 watts. There are no dryers in the range of 2000–3500 watts. Why did the power company choose an obviously wrong number in the middle of the dead zone? They're averaging all dryers, gas and electric.
Keep in mind a 5500W element is undersized compared to what manufacturers want, but it's limited by the 30A dryer circuit. (Contrast with gas dryers, where manufacturers face no such restriction). Gas dryers are much faster IME.
Similarly, the linked website understates or omits many other peak loads. It does not claim 2790W, which makes me skeptical of the source of this.
Your actual loads
Remember, a "KWH" is a kilowatt for an hour. Your dryer might use 5500W = 5.5KW, and if you run that for 30 minutes, that's 2750 WH = 2.750 KWH. Peak load is concerned with KW, not KWH.
The power company may already have your 30-minute peak load (from your smart meter). It may already be stated on your electricity bill. Or you could try calling the customer service department (certainly not the Sales department!) Either way, look at the last 24 months.
Which begs the question: why are they soliciting you for this rate? Did they look at your statements and see that they'll make more money that way?
If your smart-meter displays instantaneous KW (remember this is not KWH), that can help - you can just walk out there and check it "live". Try turning on every single thing you have even a small probability of using all at once: cooktop, dryer, max the A/C, blast the hot water, and see what the meter tells you is your current instantaneous KW. Multiply that by $6.64, that will be almost all your electricity bill every winter month when power is essentially free on this plan. Just to armwave:
- 3000W for various 120V loads.
- 5500W for the dryer (30A)
- 5500W for air conditioner (30A)
- 5500W for an electric hot water heater on a 30A breaker
- 3500W for a couple burners on the stove
If you think a perfect storm is unlikely, consider cooking. Washing dishes, making a lot of heat in the kitchen which the A/C must work harder to remove... this loads all of the above, except the dryer.
So I see 23000W or 23kw peak, or @$6.64 about $152 monthly.
That's just for the monthly peak-usage fee.
It could be even worse in the winter, if you had electric heat. A typical 8-foot baseboard is 2000 watts, with shorter baseboards proportional.
There will also be the cost of the electricity proper: close to zero most of the time, and normal price during peak air conditioning hours 2–7pm M–F Jun-Sep. That part of the deal is quite generous.
But your peak loads are murder. An ideal house that draws 2000W continuously (the way the nuke makes it), would cost $37/mo.** under this plan, $94 in the summer months (less if it was smarter).
** $10 monthly fee, $13 peak fee, $14 energy usage
The same, more realistic house that averages 2000W and peaks at 20,000W would cost $157*** in winter, and $213 in summer.
*** $10 monthly fee, $133 peak fee, $14 energy usage
Turn the tables
I personally think humans are too fallible. One false move — dry while cooking once — and your bill leaps $34. The best plan is to add some technology that makes compliance automatic and human-proof. At the least, interlocks to keep you from running appliances at once. At best some "smart home" technology that auto-throttles appliances in a sequence — cooktops > hot water > A/C > dryer etc.
First, you can't work blind. You have to actually know your moment-by-moment usage. Install a home-energy monitor like Neurio, Aeotec or Curb into your house. These put sensors inside your service panel, which clip to the L1 and L2 "hot" wires. They come up on your phone or tablet and give you rich displays about what your energy usage is. They can even pick out individual appliances based on their electrical noise.
Bigger picture, it's a huge opportunity to architect smart systems that automate much of this. Even more could be done with heat storage — have a large insulated water tank in the backyard, and all night, your heat-pump chills it with cheap midnight power, and by day, you use it to air-condition your house much more efficiently. All this leads to a "smart grid" where the power company can do load-management, i.e. tell your dryer to stop heating for a minute so they can avoid having to spin up an expensive peaker.
Guess who pays for this tech.
If they could actually get people to do this sort of thing, then this plan would make sense for the grid. But where is the PR campaign explaining to consumers how to do this? If it exists, it's pretty feeble, isn't it? They don't profit when people are smart, they profit when people are stupid.
Ironically, their rate punishes peaking, but doesn't reward conservation. Those annoying 24×7 "vampire loads" that the rest of us are stomping out? Not your problem. They lavishly reward you for consuming energy off-peak: mine bitcoins, grow medicinal herbs or pot, whatever. Consider 5000W of grow lights, rigged to shut off at peak summer hours or when you are running dryer, water heater, A/C or kitchen. It adds nothing to your peak usage fees, and you pay <1 cent per kwh. Crazy. Crazy. They are literally giving power away.
Do exactly that: Bitcoin
Since I wrote this, we have been flooded with almost daily inquiries for people trying to wire up Bitcoin miners, which take an impressive amount of electricity and so a cheap electric rate is key. I keep thinking about this rate. You can't avoid peaks, but you can have the Bitcoin miners working very hard in all the valleys for a penny a KWH. You would need some sort of power line monitoring to have the miners "back off" when you start the dryer so they do not heighten the peaks. The hardware for that isn't that hard to find.
Why on earth
Easy: your area is over-nuked. Nukes provide base-load. They run 24×7 full throttle, stopping only for fuel changes (and fuel is dirt cheap). So they have a glut of midnight power — they literally can't give it away. (this video here, after 10:09). Meanwhile they're starved for peakers, because they're spending all their money on more nukes at $7/watt (for political reasons) instead of useful peakers like turbines and solar (for a fraction). So they have to clip the peaks, and they're using punitive rate charges to do it.
Trouble is, consumers won't understand why the rate punishment, won't have the tools (energy monitor) or knowledge to change their behavior, and will just get exploited. A swindle indeed.