Peak demand 101: Why SRP offers time-of-use price plans

A graphic depicting electricity usage and electrical demand as the day goes on.

Why offer time-of-use plans?

Ever wonder why SRP offers plans like the SRP EZ-3 Price Plan™ and the SRP Time-of-Use Price Plan™? The reason is peak demand.

Imagine this: Your kids get home from school around 3 p.m. and you get home from work around 5 p.m. As everyone arrives home, lights come on, technology and appliances get used, and your AC is running at full blast to meet the cooling needs of the hottest part of the day. Scenarios like this are happening in homes all around the Valley at the same time, and the result is peak demand.

As you might imagine, the demand for electricity changes throughout the day. During the average weekday, many people live on similar schedules and use energy at the same time. Summer heat is also a major factor when it comes to energy use in Arizona. Meanwhile, mass amounts of electricity can’t be easily stored. Energy is generated, transmitted and distributed as it’s needed.

Read our related blog post, Electricity 101: How the grid works

If you’re not on a time-of-use price plan such as EZ-3 or Time-of-Use, you may not even think about these “on-peak” hours, as you pay the same price for electricity regardless of when you use it. However, the cost of producing electricity does change based on the time of day and the demand from the community at large.

To make up for this additional usage all at once, SRP has to start up additional power plants to meet the needs of homes in our service area. Because the window for this peak usage is relatively short, the process is both inefficient and costly. There are environmental consequences as well.

Learn how you can help save the environment by saving energy at home.

How time-of-use pricing helps reduce peak demand

With time-of-use price plans such as EZ-3, Time-of-Use, and the SRP Electric vehicle (EV) price plan™, we offer lower prices during off-peak hours and higher prices during on-peak hours. The EV Price Plan even has super off-peak hours for EV charging overnight. The goal of these plans is to spread out demand for electricity, which is a win-win for SRP and our customers.

Here’s how: When customers use less energy during the highest-use hours of the day, they save money on their energy bills. Some customers actually save hundreds of dollars a year! It’s a win for SRP because it decreases the likelihood that we’ll have to bring another power plant online during periods of peak demand. This creates efficiency, saves us money (that we can pass on to our customers) and helps the environment.

On the Basic Price Plan and thinking of switching? Take a look at all the price plans we offer.

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