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What are the best Consumers Energy electric rate plans?

Energy bills can be complicated and mysterious. While the cost of apples (for example) is the number of apples times the price per apple, utilities slice and dice their energy "apples" (or units) in a variety of ways. And many utilities don't make it clear how much their whole apples cost you (they instead tell you the price for every little slice).

The purpose of this article is to help you understand your Consumers Energy energy bill. So you can take control and cut it. The next article in the series will show you quick and easy ways to cut it.

To see your current energy rates, click here to scroll down.

Quick note
This article is focused on your electric bill. When we say energy, we mean electricity. The article doesn't consider natural-gas heating.

A "Tiered rate plan" is a rate plan where the amount you pay per kWh for electricity increases as the quantity of electricity consumed increases. Generally there is a baseline allowance of a certain number of kWhs (kilowatt hours) per month that are charged at a cheaper rate, and then usage above this allowance is charged at a higher rate.

A "Time-of-Use" rate plan is an electricity plan where the amount charged per kilowatt hour (kWh) is determined by the time of the day and the season of the year in which it is used.

Time-of-Use plans will typically have "peak" periods with higher rates and "off peak" periods with lower rates.

The idea behind time of use billing is to get customers to use less power at peak periods (when most people use a lot of power). Peak periods put a lot of strain on the grid. This is why time of use billing is being implemented by all major utilities. It is an attempt to encourage consumers to help spread out the load, and thus reduce investment needed to support brief periods of extremely high usage.

If customers can adjust their habits to use appliances at non-peak times they have the potential to significantly lower their electricity bills. Although, as power at peak times is much more expensive, if you continue to use lots of power at peak times your bill could be higher.

How does our rate plan work?

Your energy bill has two parts:

  1. A service charge
  2. An energy charge
The service charge

The service charge is the same for all households — whether they run a single desk fan or a hundred air conditioners. It covers Consumers Energy expenses that aren't directly related to your energy usage. Examples are Consumers Energy's phone-support staff, and the hold music you hear while waiting for phone support. The service charge doesn't change month by month. It's only about 6% of a typical family's total monthly energy bill ($7.93 out of $143/mo).

The energy charge

Unlike the service charge, the energy charge is based on actual usage. What's the energy unit that Consumers Energy uses? Like other U.S. utilities, they charge per kilowatt-hour, abbreviated as kWh. Let's use the classic light bulb example to understand kilowatt-hours:

100 light bulbs x 10 watts per light bulb = 1,000 watts. A "kilo" is a thousand, so 1,000 watts = 1 kilowatt.

…If the light bulbs are left on for 1 hour, that's 1 kilowatt x 1 hour = 1 kilowatt-hour (when in doubt, just squish words together).

1 kilowatt x 1 hour = 1 kilowatt-hour (kWh)

Let's make sure you have that. How many kilowatt-hours are used if you leave one hundred 10-watt light bulbs on for an hour? …1 kilowatt-hour. Here are the steps: 100 light bulbs x 10 watts each = 1,000 watts. Divided by 1,000 = 1 kilowatt (there are 1,000 watts in a kilowatt). Left on for 1 hour = 1 kilowatt-hour.

Standard energy unit
Unit name: kilowatt-hour
Abbreviated as: kWh

Now let's talk money. How much does Consumers Energy charge to keep this single kilowatt-hour (kWh) of light bulbs on for an hour? Under the standard rate plan (code name: RS), they charge 15¢ per kWh on average (for a home with typical usage). One kWh multiplied by 15¢ per kWh equals…15¢. If the 100 light bulbs were kept on 24x7 for a month (720 hours straight), Consumers Energy would charge $108.

100 lightbulbs x 24/7 x 15 cents = $108
What's a typical Consumers Energy customer's energy bill?

A typical family in Consumers Energy territory uses 936 per month on average (for perspective, they'd get to the same total by keeping 22 typical laptops on 24x7). They pay $143 per month for those 936 kilowatt-hours. How does your home compare?

How do Consumers Energy rates compare to the national average?

Consumers Energy rates are higher than the national average — the average Consumers Energy rate for a family with typical energy usage is 15¢ (including the service charge). The average national residential rate is 13¢.

What are rate tiers?

To complicate things (we're talking about energy bills after all), Consumers Energy doesn't just charge the same flat rate for every kWh of energy. They increase the rate when energy thresholds are reached across the month. In other words, the default rate plan (code name: RS) is tiered. Energy in the second tier is 23% more expensive than energy in the first tier.

Let's connect this to life with a 1 kW espresso machine (which draws 1 kW of power at any given moment). Let's say the machine is on for an hour every morning. That's 1 kW times 7 hours per week, which equals 7 kilowatt-hours (we'll pretend it's on non stop). With summer-season rates, the total cost to run it in the first week—at the cheaper tier-1 rate—is: 97¢. The cost to run it in the last week—at the more expensive tier-2 rate—is: $1.20. So Consumers Energy is charging an extra 23¢ for the same amount of energy.

Is it worth foregoing espresso in the last week to save 23¢? Never.

Does Consumers Energy charge a premium in the summer?

Yup, summer rates are 10% higher than winter rates for a typical family. Between this and higher summer usage, the average summer bill is 30% higher than the average winter bill ($170 vs $130 per month). Consumers Energy's summer-rate season goes from June 1 to September 30.

Would we have a lower bill on a different Consumers Energy rate plan?

Consumers Energy offers a "time of use" rate plan that you could voluntarily switch to. Under the time-of-use rate plan, you'd pay a different rate depending on when you use energy over the course of a day. Time of use gives you more control over your energy bill. Depending on how you use energy, it could start saving you money immediately.

Newer type of rate plan
Typically referred to as: Time of Use
Abbreviated as: TOU

The next article in this series will go into the time-of-use rate plan in more detail, and will show you how to leverage time of use to cut your bill.

money bills

Find out how much you could save with time-of-use. Get personalized results with the Cut My Bill calculator. It's free and easy.


What are our current Consumers Energy rates?

If you're on Consumers Energy's default residential rate plan (code name: RS), here are the rates you currently pay:

Default plan's rates
Plan Name: Residential (RS)
Last Update: April 1, 2018
Fixed Charge: Service Charge: $7.93
Summer (June 1 to September 30)
Rate per kWh
Tier1: $0.139
Tier2: $0.172
Energy in Tier
Tier1: First 600 kWh
Tier2: Above 600 kWh
Winter (October 1 to May 31)
Rate per kWh
Tier1: $0.139
Energy in Tier
Tier1: All kWhs

Are the rates shown here accurate?
Determining the actual rates charged by a utility can be daunting, so websites typically just publish general estimates. Cut My Bill is different — we're showing you your real up-to-date Consumers Energy rates. Here are the nitty gritty charges we've accounted for: power supply charge, power supply cost recovery factor, power plant bill credit, delivery charge, securitization and securitization tax charges, power plant securitization charge, energy efficiency electric program surcharge, residual balance reconciliation surcharge, low-income energy assistance fund surcharge, renewable energy plan surcharge.
Rates can be verified here.

We're already on time of use — what are our current rates?

If you're already on Consumers Energy's optional time-of-use rate plan (code name: RT), here are the rates you currently pay:

Time-of-use plan's rates
Plan Name: Residential - Time of Day (RT)
Last Update: April 1, 2018
Fixed Charge: Service Charge: $7.93
Summer (June 1 to September 30)
Rate per kWh
Off-Peak: $0.123
Peak: $0.158
Weekday Times
Off-Peak: Midnight to 11am, 7pm to midnight
Peak: 11am to 7pm
Weekend Times
Off-Peak: All hours
Winter (October 1 to May 31)
Rate per kWh
Off-Peak: $0.126
Peak: $0.136
Weekday Times
Off-Peak: Midnight to 11am, 7pm to midnight
Peak: 11am to 7pm
Weekend Times
Off-Peak: All hours

How do I work out if I am on the cheapest Consumers Energy rate plan for my usage pattern?

To do an exact comparison on how much you would save from switching plans requires collecting your detailed usage data for the last 12 months. This is known as Interval Data and sometimes also called Green Button Data.


Interval Data
Green Button data


Interval or Green Button data is your electrical usage data for the last 12 months in one hour (or even shorter) intervals. This data is available from your utility provider.

What are the best ways to cut our bill?

We're glad you asked. Let's continue to the article: Three Best Ways to Cut Your Consumers Energy Bill.


Ready to stop reading and start cutting (your electric bill)? See how much you can save by switching to a time-of-use rate plan. The Cut My Bill calculator is free and easy.