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Why are Los Angeles Department of Water and Power (LADWP) electricity rates lower than other utilities in California?

As the name suggests LADWP is the power and water utility that services the city of Los Angeles.

However, it does not service all of the cities of Greater Los Angeles and the City of Burbank, the City of Asuza, the City of Vernon, the City of Pasadena and the City of Glendale all have their own power utilities. Southern California Edison also has a power service territory in the greater City of Los Angeles.

However LADWP is the largest power supplier to the City of Los Angeles. It has more than 1.4 million electricity customers and around 900,000 gas customers. It is also the largest municipal owned utility in America.

LADWP is different to the three largest utilities in California (PG&E, SDG&E and SCE) because it is still owned by the Los Angeles City Council.

Being publicly owned has a number of advantages and allows it to supply power to LA residents at lower prices than the surrounding "Investor Owned" utilities that supply other areas of California.

These pricing advantages are:

  • It is not regulated by the PUC (Public Utilities Commission) like the investor owned utilities are. This means it is not restricted in the means it can use to source power and is not subject to other regulations that can increase costs.
  • It is not required by its shareholders to make a return on capital as an investor owned utility is. Power networks have a capital value of many billions of dollars and so making an acceptable market return on this capital is what tends to make investor owned utilities have higher electric charges to the end customers.

A summary of LADWP residential electric rate plans

LADWP offer a choice of either a Tiered rate plan (R-1A ) or a Time-of-Use rate plan (R-1B ) to their residential customers.

A Tiered rate plan is a plan where the amount you pay per kWh for electricity increases as the quantity of electricity you use increases. Generally there is an allowance of kWhs (kilowatt-hours) per month at a cheaper rate and then use above this allowance is charged at a higher rate.

Most LADWP residential electricity customers are currently on the R-1A Plan which is a standard tiered plan.

A Time-of-Use electric rate plan is an electricity plan where the amount you are charged per kilowatt-hour (kWh) for power is determined by the time of the day that you use it.

They typically have "peak" times of the day with higher rates and an "off peak" period with much lower rates.

Standard Residential Rate (R-1A)

The standard residential electric rate is based on the following criteria:

  • Location: Zone 1 or Zone 2
  • Season: High season (June - September) or Low season (October - May)
  • Consumption: Amount of electricity used in each tier

What are the Zones?

The zones are geographic areas that have different climatic conditions that are likely to affect how much electricity a consumer will need to use.

Zone 1 are the more coastal areas of Los Angeles with a more mild climate and Zone 2 are the inland areas where a higher allowance of base electricity is allowed.

Image source: www.ladwp.com

What are tiers?

Hotter temperatures cause refrigerators and other electrical appliances to work harder and use more energy. Based on thatand recommendations from the California Energy Commission, the LADWP has divided Los Angeles into two temperature zones. People who live in the hotter parts of the city, Zone 2, are allowed a little more energy in Tier 1 than people who live in the cooler areas of Zone 1.

The amounts of kWh allowed in each tier are based on the total usage across a 30-day billing cycle.

Zone 1 Zone 2
Tier 1 First 350 kWh First 500 kWh
Tier 2 Next 700 kWh Next 1,000 kWh
Tier 3 Above 1,050 kWh Above 1,500 kWh

What are the actual rates on R-1A?

Total Cost per Tier (excluding taxes):

Plan Name: Residential - Rate A (R-1-A)
Last Update: July 1, 2017
Fixed Charge: MinimumEnergy Charge: $10
Summer (June 1 to September 30)
Rate per kWh
Tier1: $0.156
Tier2: $0.197
Tier3: $0.265
Energy in Tier
Tier1: First 506 kWh
Tier2: Next 1,012 kWh
Tier3: Above 1,518 kWh
Winter (October 1 to May 31)
Rate per kWh
Tier1: $0.156
Tier2: $0.197
Energy in Tier
Tier1: First 506 kWh
Tier2: Above 506 kWh

The minimum charge for the Standard Residential Rate is $10 per month plus the adjustment factors (Energy Cost, Electric Subsidy, Reliability Cost, Variable Energy, Capped Renewable).

What are LADWP Time-of-Use Residential Rates (R-1B)?

Total cost per time period (excluding taxes):

Plan Name: Residential - Time of Use, Rate B (R-1-B)
Last Update: July 1, 2017
Fixed Charge: Service Charge: $10
Summer (June 1 to September 30)
Rate per kWh
Off-Peak: $0.149
Mid-Peak: $0.173
Peak: $0.243
Weekday Times
Off-Peak: Midnight to 10am, 8pm to midnight
Mid-Peak: 10am to 1pm, 5pm to 8pm
Peak: 1pm to 5pm
Weekend Times
Off-Peak: All hours
Mid-Peak:
Peak:
Winter (October 1 to May 31)
Rate per kWh
Off-Peak: $0.153
Mid-Peak: $0.156
Peak: $0.156
Weekday Times
Off-Peak: Midnight to 10am, 8pm to midnight
Mid-Peak: 10am to 1pm, 5pm to 8pm
Peak: 1pm to 5pm
Weekend Times
Off-Peak: All hours
Mid-Peak:
Peak:

Time-of-Use (TOU) rates are based on the time of day and season that you use electricity. There are three time periods: High Peak, Low Peak, and Base.

During the winter, when the demand for power is low, your energy prices for this rate are lower than the Standard Residential rate shown above. In addition, low peak and high peak prices are the same during the winter.

During the summer, your TOU prices will overlap the Standard Residential Rate. During the Base hours, when customer use is low, your price will be lower than the Standard Residential Rate. Prices during the Low Peak hours are slightly higher than standard rate. In the High Peak hours, the cost to the utility to generate and supply energy is the highest, and it will cost more than the Standard Residential Rate.

What are LADPW Peak and Off-Peak times of the day?

High Peak Period
(20 hours per week)
Monday through Friday
1:00 PM - 4:59 PM
Low Peak Period
(30 hours per week)
Monday through Friday
10:00 AM - 12:59 PM
5:00 PM - 7:59 PM
Base Period
(118 hours per week)
Monday through Friday
8:00 PM - 9:59 AM

All day Saturday and Sunday

Does the Time-of-Use rate (R-1B) or the Tiered (R-1A) rate work out cheaper overall?

Your monthly bill may be lower on the Time-of-Use plan if you can use 65% or more of your electricity during the base hours.

If your bi-monthly electric bill is over $350 or your average bi-monthly kWh usage is more than 2,000 kWh, then use the following checklist to decide if you want to try the Time-of-Use Rate:

  • I have a filtered swimming pool, spa, or fish pond
  • My home is all electric
  • I use a central air conditioning system
  • I use electric space heating
  • The members of my family are usually not at home during the day

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

LADWP offer a tool on their website to help you determine if a Time-of-Use plan might be cheaper but it only seems to require basic inputs and is not an exact comparison. Check to determine if you may be a good candidate for this rate option.

To do an exact comparison requires collecting your detailed usage data for the last 12 months (commonly called "Interval" data or "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.

 

HINT: Often the easiest way to get this data is to ask a solar company to get it for you as they need to retrieve this data in order to properly estimate the costs and savings that might be available to you by installing solar panels in the LADWP area.

How do I get my interval data for the last 12 months?

This data may be available from LADWP although they are required by law to send it to you as the utilities are regulated by the PUC.

There is also a website called UtilityAPI.com that allows you to get this data for $15 (they have an electronic interface to LADWP).

However, if you own your home and it is a single family dwelling then a really good way to get this data for free is to request solar quotes from local solar companies.

Generally solar offers much bigger savings that swapping plans (as the plans are designed to give the same overall cost to average consumers) and a solar designer will usually need to get this same data to work out what size solar system would cover your bill and to forecast savings accurately for you.

Solar companies will usually retrieve and analyze your interval electricity usage data for free in the hope of winning your solar business.

Calculate the savings you will get from installing solar panels on your home in the LADWP territory!

Calculate

How much can I save per month by swapping to my cheapest plan?

For most people the amount you can save by swapping plans is minimal because the electric plans are designed to work out roughly the same in terms of total costs for consumers with average consumption patterns.

In most cases savings will be between $0-$15 per month but could be much larger for high energy users or for homes and businesses with non-typical usage patterns that also install solarpanels.

This is why most people in Los Angeles who own their own homes are now looking at solar as the best method to reduce their power bill.

Even moderate electricity consumers with a monthly LADWP bill of only $150 ( with suitable homes) can save $50 or more (even after the solar repayment) a month by going solar and in many cases they can almost eliminate their power bill after the 6-7 year payback period.

You can use these links to find solar companies near you and the cost of solar panels in Los Angeles.

Find out how to reduce your LADWP electricity bill.