Decoding LADWP Electric Rates for 2023

Understanding LADWP Electric Rates in 2023

By homesolarsessions | Aug 25, 2023

With electricity prices rising and extreme weather events increasing the demand for electricity, it is important to understand how your electric rates work in order to lower your electricity costs. The Los Angeles Department of Water and Power (LADWP) offers two residential rate schedules with electric rates ranging from under 19 cents to over 35 cents per kWh. In this article, we will explore:

1. LADWP’s Standard rate plan
2. LADWP’s Time-of-Use rate plan
3. EV charging rates
4. Net metering for solar customers
5. The history of LADWP rate increases
6. Frequently asked questions

Let’s begin by discussing the standard rate schedule and then compare it to the time-of-use rates. If you are unsatisfied with your electricity bill, you can consult with an Energy Advisor to design a solar system that can reduce your energy costs.

LADWP’s Standard Residential Rate (R-1A)

The R-1A plan is a tiered rate schedule where electricity charges vary based on the customer’s consumption during the billing period. It’s important to note that LADWP bills on a bi-monthly basis, so each billing period lasts for two months. The tiered rates are designed to provide a lower price for essential electricity needs like lighting, internet, refrigeration, and heating, while increasing the price as electricity usage increases. The rates are divided into three tiers, with Tier 1 being the cheapest and Tier 3 being the most expensive. The tiers are allocated based on the customer’s temperature zone, with Zone 1 having lower usage allotted for each tier compared to Zone 2. The average daily electricity consumption in California is 18.1 kWh, which equates to 1,086 kWh over a 60-day billing period. Typically, customers can expect to consume all of their Tier 1 electricity and dip into Tier 2. However, higher consumption in the summer due to air conditioning usage can push customers into Tier 3 rates, which can exceed 35 cents per kWh.

LADWP’s Time-of-Use Residential Rate (R-1B)

LADWP’s time-of-use rates (TOU) range from 19.1 to 29.5 cents per kWh in 2023. Unlike the standard rate schedule, TOU rates vary based on the time of day and the cost of generating and delivering electricity through the grid. The R-1B plan includes a $12 per month service charge and is divided into three periods: Base, Low Peak, and High Peak. Customers with higher electricity consumption can save money by shifting their usage to the Base and Low Peak hours, as electricity rates during these periods are lower compared to the High Peak period. For example, running a load of laundry during the Base Period can save 26 cents compared to running it during the High Peak period. Shifting consumption to the Base Period can result in significant savings over a billing cycle. The Base Period includes nights and all day Saturday and Sunday, making it more convenient to shift usage for tasks like laundry, pool pumps, and EV charging.

LADWP EV Charging Rates

LADWP offers a $0.025 rate discount for customers who charge their electric vehicles (EV) during Base Period hours. However, there are some requirements for receiving this discount. The EV charger must be on a separate meter from the main meter, and the EV meter must be on a TOU rate schedule. There is also a minimum monthly charge of $10 plus adjustment charges. To break even on the $10 monthly charge, customers would need to charge their EV with at least 400 kWh of electricity per month during Base hours. This would require driving at least 47 miles per day, which is 10 more miles per day than the national average. If customers have a long commute or significant travel requirements, setting up a separate meter to receive the EV charging discount can be beneficial. However, if travel requirements are low, it might be more cost-effective to go solar and reduce the cost of charging the EV.

LADWP Rates and Home Solar

LADWP offers net metering for customers who own solar systems. Under net metering, solar owners are compensated at near-retail rates for the excess electricity their systems generate and push onto the electricity grid during the day. This means that a solar system designed to offset 100% of a customer’s electricity use can offset up to 100% of their LADWP bill, with the exception of fixed basic charges. Solar owners can choose to use either the Standard or TOU rate plan. This differs from the NEM 3.0 solar billing adopted by California’s investor-owned utilities, where solar owners are compensated at a lower rate for excess production. Achieving a 100% bill offset with a solar-only system may not be possible under NEM 3.0, but it can be achieved by combining solar with battery storage.

LADWP Electric Rate Increase History

Like all utilities, electricity rates tend to increase over time, and LADWP is no exception. Rate hikes were particularly significant during the pandemic years of 2020-2022. From 2019 to 2023:

– The Tier 1 rate in the R-1A Standard Rate plan nearly tripled.
– The Tier 2 rate more than doubled.
– The Tier 3 rate increased by nearly…

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