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Residential Time of Use Pilot Program


The TOU Pilot Program is a voluntary rate for residential ratepayers that began in April 2021. It is limited to the first fifty customers enrolled. A customer may opt out of the program at any time. Implementation of this rate schedule shall apply to the first full billing period after sign-up for the PILOT rate.

To sign up:

Email: (Indicate “TOU Pilot Program” in the subject line)

Provide the following information:

  • Name
  • Address
  • Account Number
  • Phone Number


What is the Residential Time of Use (TOU) Pilot Program?

Under TOU, the price you pay for your electricity changes based on the time of day. There are two levels of pricing: off-peak and on-peak. When you shift your electric use to that time of day that is off-peak, demand for electricity is lower, therefore, you are being charged at a lower rate compared to on-peak. On-peak hours is that time of the day when demand for electricity is the highest.

  • Off-Peak Hours:  Monday – Friday, 4 p.m. – 11 a.m.; weekends and holidays*
  • On-Peak Hours:  Monday – Friday, 11 a.m. – 4 p.m.; Excludes holidays*

* New Year’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day                      

What are the monthly rates?
            Customer Charge:       $7.50 per month, plus

            Energy Charge:          19.57¢ per kWh On-Peak
                                             8.00¢ per kWh Off-Peak

How can a customer save on their bill under these rates?

The key with TOU rates is in when you chose to do tasks that consume significant portions of energy. For people who naturally use more energy at off-peak times, they will not have to change any behaviors in order to save. For others, they will need to make deliberate choices to shift their electric-consuming activities to the off-peak time frame, such as doing laundry, operating the dishwasher, or charging their electric vehicle.

Additionally, electric heating and home cooling make up a large chunk of your energy use and your bill. The best way to save on your energy bills is to utilize a smart thermostat to lower your home temp in the winter and raise it during the summer months.

Does TCLP receive more revenue with a TOU rate?

No, the switch to TOU pricing is not a rate increase. The rate structure is designed to generate the same amount of revenue on an annual basis as the normal rate structure. Off-peak prices are lower than the normal residential rate, while on-peak prices are higher. Doing this equals approximately the same amount of revenue, except that now there is more flexibility for customers to control their electric costs.

Who is eligible to participate in the Pilot Program?

Residential customers to include single family residences and individually metered dwelling units in: mobile home courts, apartment buildings, condominiums, and multiple dwelling units.

Why develop a TOU program?

There are multiple reasons for implementing a TOU Program. From an environmental standpoint it encourages energy conservation. It is also anticipated that shifting more usage to off-peak periods will assist TCL&P’s efforts towards decarbonization by moving away from base load generators using fossil fuels to generate electricity.

From a financial perspective, the cost to produce electricity changes throughout the day based on when it is used. When people use more electricity, the cost goes up; when people use less, it goes down. TOU pricing better aligns electricity costs with market prices. Higher customer demands during on-peak hours drive higher costs. This means that prices are lower during off-peak hours when demand and utility costs are also lower.

Traverse City Light and Power also has to pay for capacity (ability to generate electricity) to ensure a steady supply of electricity is provided to its ratepayers. The amount of capacity TCL&P is required to have is determined when the utility peaks in electricity consumption, which historically been mid-July in the afternoon when people are cooling their buildings, offices or home spaces.  Any reduction in this peak will lower the utility’s cost for capacity and provide savings for both the utility and its ratepayers.

Lastly, it creates fairness by recovering the costs to provide electric service in an equitable manner. Those customers who cost more to serve pay more and those customers who cost less to serve pay less.

Why is this only a pilot program at this time?

The utility wanted to take the opportunity to review customer data, and to ensure that the new automated metering and billing system is working flawlessly before a full deployment.