Residential TOU FAQ
What are Time-of-Use rates?
Time-of-use (TOU) rates are based on the time of day you use electricity and MGE's cost of supplying electricity to you during that time. If you use electricity when the demand for electricity from all MGE customers is low—known as off-peak hours—your rate will be discounted. Electricity used during periods of high demand—known as on-peak hours—will cost more.
Why do utilities offer TOU rates?
TOU rates offer customers more control over their electricity costs. The rates encourage customers to use more of their electricity during lower cost times, thus helping to balance the electric load on our system. TOU customers pay more when it is more expensive for MGE to buy or generate power to meet the needs of all customers.
How can customers benefit from TOU rates?
Customers will see the greatest benefit when they shift as much of their electricity use to the "off-peak" times as they can. Typically, customers who can use at least two-thirds of their use "off-peak" will save on their energy bills.
When are on-peak periods?
Higher priced, on-peak periods are weekdays between 10 a.m. and 9 p.m., excluding major holidays:
When is off-peak?
Lower, off-peak rates are in effect about 68% of the time:
- 9 p.m. to 10 a.m., Monday through Friday
- Major holidays: New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day
How are TOU rates charged?
All kWh electricity use is now charged a base energy, all kWh charge, no matter when the power is used.
- During off-peak, the base all kWh rate is the only energy charge.
- During the three on-peak periods, there is a peak charge added to the base energy, all kWh charge to reflect the higher cost to generate electricity for the higher electricity use times.
Why are TOU rates higher in the summer?
Electricity rates are slightly higher from June 1 through September 30, when electricity from more expensive generation sources is needed to supply the higher use of electricity from all customers.
The base energy, all kWh charge will not increase during the summer months for TOU customers. The higher cost of electricity is reflected in on-peak charges, with the on-peak period 2 slightly higher than on-peak periods 1 and 3, to mirror the extra cost to supply electricity for the highest summer energy demand period.
Do customers have a choice whether to use TOU rates or not?
TOU rates are mandatory for some customers:
- All MGE business customers with a demand greater than 20 KW.
Any business customer with 20 KW demand or less can choose to be served on TOU/demand rates on the Cg-4 rate schedule.
- A customer choosing this option must stay on TOU rates for at least one year, but may shift back to the standard rate after one year as long as demand remains below 20 KW.
How do I sign up?
Call Customer Services at (608) 252-7222 during business hours (8 a.m. to 5 p.m., M-F) or email firstname.lastname@example.org. We'll send an agreement for your signature and start the request for your new meter installation.