SMUD pilot shows customers don't like fixed rates
- Sacramento Municipality Utility District (SMUD) recently conducted a two-year study to test consumer attitudes to fixed rate and time-of-use/critical peak pricing rate plans, and found overwhelming support for the latter.
- Overall satisfaction was higher with a default time-of-use (TOU) plan than the standard fixed rate plan -- 84.4% were very or somewhat satisfied with default TOU rates while 80.3% were similarly satisfied with the standard plan. Those who opted-in to the flexible plan were 87.1% satisfied.
- Customers felt that the new time-of-use/critical peak pricing rate plans were more understandable, more fairly priced, and saved them money in comparison to the fixed flat rate.
- Time-of-use rate plans will become the default for SMUD customers in 2018, with the option of going back to a flat rate should customers choose to do so.
Few utilities have many customers enrolled on time-of-use pricing plans, which charge consumers more or less depending on the time of day. Common wisdom has been that utility customers would be opposed to time-of-use rates, but the success of SMUD's pilot may change minds.
“People like choices. A lot of people wanted to stay on the rates," said Jennifer Potter, a principal analyst at SMUD. SMUD will allow customers to stay on the rates while it rolls out the program to the rest of its district in a few years.
- GreenTech Media Consumers Really Want Options in Utility Rate Plans