Missouri River Energy Services to Introduce TOU Rates for Members Next Year

by Peter Maloney
APPA News
August 29, 2022

Missouri River Energy Services (MRES) plans to introduce wholesale time-of-use (TOU) energy rates for its member public power utilities in 2023.

The new rates would be higher when everyone is using power at the same time during periods of peak demand, typically from 12:00 to 8:00 p.m. during the summer, and cheapest overnight when few people are using power. Rates in the mornings are going to be mid-priced, Joni Livingston, vice president of member services and communications at MRES, said during a Pella, Iowa, city council presentation earlier this month.

Pella is one of the 61 member public power utilities in Iowa, Minnesota, North Dakota, and South Dakota for which MRES provides wholesale power and other energy services.

The change should be revenue neutral for MRES with “very little change for most of our members,” Livingston said. For Pella, she said, the rates would be about a 0.1 percent increase based on your previous usage. So, you should see very little change.”

“We did that purposely because we wanted to get people use to seeing what a time-of-use bill looks like and how time-of-use works,” Livingston said. “We didn’t want that to make any impact on your costs at first.”

The joint action agency has been letting its members know about the pending change for years, Livingston told the city council.

“If you want to bill your customers on time-of-use rates, you have to be sure your billing program will do it. It takes some time on the retail side of things.”

Livingston said the city, as well as other members, should think about passing on those rates to customers because it would give them the opportunity to save money. “If they can shift some of their usage off of your peak time” – typically 4 in the afternoon to 8 at night in both summer and winter – “they would actually save money with these rates.”

“Larger industrial and commercial customers, depending on their processes and how they can change things around or shift things to later time periods, it might make a big difference to them as well,” Livingston added.

Demand is somewhere between 40 and 50 percent of Pella’s total energy costs, “so anything the city can do to shave its peak load can have a significant savings for our community,” Mike Nardini, Pella city administrator, said during the meeting.

For a lot of MRES members, their current billing systems do not work with time-of-use rates, Livingston said, noting, however, that MRES has entered into a partnership with Tyler Technologies and is now offering member utilities a discount when they upgrade to Tyler’s TOU-compatible billing software.

Advanced metering infrastructure (AMI) – something Pella has been considering for years – also “needs to be in place for TOU rates, but there are also a ton of other benefits,” Livingston said.

AMI allows a utility to offer customer different metering intervals, not just monthly meter reads. That can give them and you more insight into how much electricity they use and when it is being used, and they can better manage use and costs.

The technology also reduces meter misreads and gives a utility the ability to do remote connections and disconnections, as well as quicker outage restoration and notifications, Livingston said. AMI also provides more accurate metering for charging electric vehicles, which are growing in popularity, she said.