Utility Tariffs vs. Electric Rates – What’s the Difference?

Electric Rate

Are utility electric rates and tariffs really just the same thing?

Nope – not even close!

While electric rates and tariffs often end up in the same discussion, they are not one in the same.  Understanding both is the first step in taking control of your utility bill.

Tariffs are a collection of electric rates and other charges that are applied per the specific definitions of the tariff in order to calculate your final utility bill.  The tariff defines service charges, calendar dates like holidays, time of use periods, or consumption tiers.

Electric rates simply indicate how much the utility will charge per unit of electricity consumed (usually defined in terms of kilowatt hours) or per unit of demand (usually defined in Kilowatts).

APT’s home office local utility Pacific Gas and Electric (PG&E) has over 70 tariffs covering residential, commercial, agricultural, and industrial customers.  Despite the large number of tariffs there are recurring categories: General, TOU (Time-of-Use), and Interruptible.

General tariffs charge per unit rates based on consumption, and may increase (tiers) based on how much you use.  This is how most residential tariffs are structured.

TOU (Time-of-Use) tariffs charge different rates based on the calendar date, time of day, and even time of year or season.  Time of day is typically broken down into peak and off-peak hours.  Peak hours are when everyone is using electricity, and so the electric rate is higher.  Off peak hours are when few consume electricity, so the electric rate is low.

Interruptible tariffs apply to customers with interruptible loads (i.e. customers who can reduce their consumption during high demand periods and or emergencies).  A great example would be a quarry that crushes rock or processes materials – if the cost of energy exceeds the cost of the material, they just stop processing and use stockpiled material.

APT works closely with customers to understand their specific tariff and electric rates, and then implements a power monitoring infrastructure to measure consumption and demand.  APT’s RECIPE Analytics platform uses the same tariff and electric rate to calculate the bill.  This lets customers forecast, accrue, and reconcile their utility bills to control costs.

Understanding your tariff and electric rates is the first step in taking control of your utility bill.  APT will work closely with you to take that first step to control costs.

Example Electric Tariff