Starting in March, DTE will charge peak-hour rate
DTE says it will ‘smooth out peaks in demand’ by charging higher rates from 3 to 7 p.m. on weekdays
DTE Energy, electricity supplier to 40% of Michigan, will start charging a peak-hour rate in March.
“The residential rate is being changed to a variable Time of Day rate as a way to smooth out peaks in demand,” DTE says on its website.
The peak hours will run from 3 p.m. to 7 p.m. during weekdays, for a total of 20 hours per week.
The other 148 hours of the week, including the entire weekend, will be charged at a lower rate, 15.45 cents per kilowatt hour, DTE explains in a primer on its website.
Within peak hours, there will be two different rates depending on the time of year. From October through May, the rate will be 16.75¢ per kWh. In the warmer months of June through September, the rate will be 20.98 cents per kWh.
“When you adjust your habits and do things like laundry, dishes or run your air conditioner in off-peak hours, you benefit from a lower rate,” DTE says.
Among the frequently asked questions on the DTE website: Why does a peak-hour system help?
“Electric power is playing a bigger and bigger role in our lives,” DTE responds. “From the cars we drive to the electric appliances and devices we power around the clock, customers expect more and are using more energy. Time of Day keeps the grid balanced while helping you save through more control and more choice.”
Jason Hayes, the Mackinac Center’s director of environmental policy, sees it differently.
“They are teaching people to stop using electricity,” Hayes told CapCon. “They’re deliberately trying to price it at a point that encourages you to not use electricity.”
This change comes, Hayes notes, as DTE is transitioning away from reliable energy sources such as coal, and toward less-reliable wind and solar.
“They close their reliable generation, and then they have to discourage people from using electricity, because they know the system that they're building can’t handle the same levels of demand that it used to,” Hayes said.
Peak-hour pricing applies to DTE customers paying the D1 standard residential electric base rate.
Right now, the rates are the same regardless the time of day. Some customers have opted in to time-of-day programs.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.
DTE, Consumers’ peak-hour pricing plans have it all backward