Carlo's Think Pieces

Reflections of a Filipino in the Netherlands

Lower Electricity Rates for Night Use

Posted by butalidnl on 9 May 2010

One way to lower people’s high electricity bills is to avail of Meralco’s TOU (Time of Use)program, which offers lower rates for using electricity at the night. This scheme is based on the logic that during the daytime peak hours, electricity is produced not only from the cheaper sources e.g. hydroelectricity, but also the more expensive diesel generators. However, at night, only the cheaper sources of electricity are used, since less electricity is needed by consumers; and this means that electricity at night is cheaper.

The TOU program seems to be applicable for Meralco customers, but customers of other electricity distributors will have to have to check if their utility also has TOU programs.

The TOU Program
The TOU program is mainly for commercial and industrial customers, but it is also open to residential customers who use an average of 1000 KwH/month. Let us now look at the program from the point of view of the residential customer.

The TOU program offers discounts on electricity used at night of Php 3.927/KwH during the dry season (January to June), and Php 3.0128/KwH during the wet season (July to December). For purposes of the TOU program, the day (peak) rates are valid from 8 am to 9 pm from Monday to Saturday, and from 6 pm to 8 pm on Sunday. The rest of the time is the night (non-peak) rates.

The TOU program has some costs attached to it. The first, is a one-time fee of Php 4156.26 which covers things like having a new meter, and other administrative charges. However, if the potential savings are big, this should not be a problem.

More relevant are the extra Supply and Metering charges (i.e. these charges are on top of the regular supply and metering charges), and these total Php 23.10/month and Php 0.82/KwH.

If we count the potential savings with the monthly costs, we come up with a Break-even point of 10.7 KwH: Which means that if you consume at least 10.7 KwH/month at night, you gain from the TOU scheme. But, let us not forget the one-time fee of Php 4156.26. If you use an average of 300 KwH/month during the night, you will get your one-time fee expense back in less than 5 months.

When to Use TOU
Based on the computations above, I would recommend that consumers use the TOU scheme always if their monthly consumption of electricity is more than 1000 KwH/month (or paying about Php 12,000/month in electricity bills). You will always gain from the effort of shifting to TOU. Of course, the higher your consumption is, the more you have to gain from TOU.

The main item that uses electricity at night will probably be an airconditioning system. But since “night” starts at 9 pm, it will also cover part of the TV consumption, the computer and electric fans. To maximize the discount, you can make some changes in your consumption of electricity, such as:

  • iron clothes on Sunday (but not from 6 to 8 pm);
  • use washing machines after 9 pm or on Sunday;

Of course, it will still be a good idea to minimize the use of electricity in general. The TOU offers a discount on electricity use at night, but not using electricity will always save even more money. So, it would still make sense to lessen aircon use at night e.g. setting a timer to turn the aircon off about 2 hours before waking up in the morning. And by using more efficient new kinds of airconditioners, or even not using airconditioners at all.


2 Responses to “Lower Electricity Rates for Night Use”

  1. al de cruz said

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  2. Mallory said

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