This group brings together the best thinkers on energy and climate. Join us for smart, insightful posts and conversations about where the energy industry is and where it is going.


What are time of use rates for?

image credit: Cost are then transferred to the rate payers
Rafael Herzberg's picture
Consultant energy affairs, Self employed

Rafael Herzberg- is an independent energy consultant, self-employed (since 2018) based in São Paulo, Brazil* Focus on C level, VPs and upper managers associated to energy related info, analysis...

  • Member since 2003
  • 2,219 items added with 1,294,432 views
  • Jul 30, 2020

The answer, of course, is very simple.

The most expensive, on-peak rates signal the convenience of avoiding as much as possible consumption on these hours, transferring it to the off-peak hours, when it is cheaper.

On the supply side, the advantage of being able to meet higher energy consumption with the same generation, transmission and distribution infrastructure. This avoids CAPEX investments.

The assumption - of course - is that peak and off-peak hours are in line with reality.

It turns out that the peak of the Brazilian national system is varying. It was always on the "official" schedule between 5:30 pm and 8:30 pm. But for many months it has been noted that it can also occur in the middle of the afternoon. The reasons include changes (distributed generation for example), new power sources (more intermittent) and more recently the pandemic.

It is necessary to adjust the official peak and off-peak hours - under penalty of being wrongly signaled and consequently obtaining the opposite effect: increased costs due to a misalignment error.

Will the leaders of the electric sector have the initiative and commitment to "make it happen". Or is it just another cost to be paid by all customers ("business as usual")?

Dr. Amal Khashab's picture
Dr. Amal Khashab on Jul 31, 2020

Hi Rafael,

It sounds logic and fair request. Utilities must have eyes on the consumption pattern variations and adjust the time of use tariffs at least twice in a year.

Rafael Herzberg's picture
Thank Rafael for the Post!
Energy Central contributors share their experience and insights for the benefit of other Members (like you). Please show them your appreciation by leaving a comment, 'liking' this post, or following this Member.
More posts from this member

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »