DTE Energy’s new time-of-day rates take effect. Here’s what they mean for customers. – MLive.com

DTE Energy's Ann Arbor Service Center off Broadway Street on April 19, 2020.Ryan Stanton | The Ann Arbor News
ANN ARBOR, MI — DTE Energy’s new time-of-date rates are taking effect and for residential power customers that means electricity will cost more at peak times.
Implementation of the new rate structure begins Wednesday, March 1, for the first wave of DTE customers and overall about 2 million customers will transition to the new rates over the next month or so based on their billing cycles.
From 3-7 p.m. weekdays, the new peak-hour rates are 16.75 cents per kilowatt hour during cooler months from October through May, and then 20.98 cents per kWh during warmer months from June through September.
At all other times, including weekends, the new off-peak rate is 15.45 cents per kWh.
That’s a change from DTE’s current residential rates that range from 15.23 to 17.17 cents per kWh based on usage.
The new variable time-of-day rates are intended to get customers to shift daily behavior and reduce energy usage during peak hours when demand on the grid is highest.
Those who adjust their home habits and do things like running air conditioners, dishwashers and other devices before 3 p.m. or after 7 p.m. can take advantage of lower rates or else pay 8% to 36% more at peaks times, depending on the time of year.
DTE Energy on the scene of a power outage in downtown Ann Arbor on Feb. 1, 2023. The outage impacted a number of buildings, including the People's Food Co-Op and the Washtenaw County administration building.Ryan Stanton | The Ann Arbor News
The time-of-day rates are intended to be cost-neutral for customers and revenue-neutral for DTE, said Brynn Guster, communications manager for the Detroit-based utility.
“The way that the rate is structured, the off-peak time is comparable to where we are today and on-peak is just a pinch higher,” she said.
However, DTE is separately proposing a residential rate increase that, if approved by the Michigan Public Service Commission, could raise a typical residential customer’s monthly electric bill by $12.46 on average.
DTE has determined it needs to generate $622 million in additional annual revenue due to increased costs and to support DTE’s carbon-reduction efforts.
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It’s yet to be determined what the new on-peak and off-peak rates would be if the rate increase is approved, Guster said.
For the new time-of-day rates, DTE has set up a webpage at dteenergy.com/timeofday explaining the changes, saying more smart homes, electric vehicles and a more device-driven world mean demand on the electric grid is growing and that’s driving the move to the new model.
An updated version of the webpage will launch Friday with even more information and new tools for customers to evaluate their time-of-day energy usage, Guster said, noting customers also can track their data using the DTE Insight app.
Customers don’t need to make any lifestyle changes around energy consumption if they’re not interested, but if they do want to run larger appliances during off-peak hours and save a little, they now have that choice, Guster said.
“This is a trend that we’re seeing nationally,” she said of time-of-day rates, noting Consumers Energy already moved to a similar model and the Michigan Public Service Commission asked DTE to do the same.
Claire McKenna, an Ann Arbor city energy commissioner and University of Michigan doctoral student who does research regarding home energy use, said while many customers may not see large changes in their utility bills, the new time-of-day rates could be disruptive for households on tight budgets.
“As a researcher who studies equity in access to public energy utility services, I am concerned that households already experiencing hardship or living on a close budget may find it difficult to adapt to a new pricing structure that varies seasonally and throughout the day,” she said. “Not everyone has the ability to shift their electricity usage during the more expensive windows, and the higher summer costs may limit the feasibility of summer cooling for some households.”
DTE advises customers to get programmable thermostats and pre-cool their homes before 3 p.m. to save money.
“We certainly want everybody to stay as comfortable as they can year-round,” Guster said, adding DTE has a lot of energy-efficiency tips it’s going to be sharing to help customers save and stay comfortable in the summer.
“If a customer has a hard time paying their bill, we do have resources available, so we definitely want to make sure customers reach out if they need help,” she said.
Customers with their own solar panels and backup batteries also can program their smart systems to not draw energy from the DTE grid during peak hours.
“As we move to this really electrified world that’s happening, everybody has an opportunity and maybe an interest to shift that energy use outside of on-peak hours because it helps them have a little bit of a lower energy cost,” Guster said.
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