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​​​february 2, 2017
​five things to know about demand-based rates
​customers can save money, have more control over their energy use and monthly bills
PHOENIX – A demand-based rate plan, known as APS’s Combined Advantage plan, has proven popular and successful for many APS residential customers. It gives them more options to control their bill and save money. Today, APS has 120,000 residential customers using this plan, more than any other utility in the country.


With more than three decades of experience with customers on the rate plan, APS has seen customers save on their monthly energy bills and reduce their peak usage during on-peak hours, when they are using the most energy and costs for electricity are highest. Customers can save on demand rates with small changes in how and when they use energy. It is important to understand that the peak usage charge isn’t an add-on to the existing bill or an increase in rates. Rather, it is just a different way to break down a bill’s components.


“My family saves money on the Combined Advantage plan,” APS customer Penny said in a testimonial. “We have our pool pump set to clean at night, and I do the dishes and laundry in the morning or later in the evening. It’s easy to manage; even our three kids do it with no problem. After a while, it just becomes natural to use the appliances at different times in the day.”


Those benefits are among the reasons why APS is requesting in its 2016 rate review to expand demand-based plans to most residential customers. Three of the four proposed residential rate options include a peak usage (demand) charge.


“Demand-based rate plans work for our customers,” said Stacy Derstine, Vice President of Customer Service and Chief Customer Officer for APS. “Our current demand rate plan continues to grow and has increased 33 percent in the past six years. Demand rates offer customers more ways to manage their energy use and save money.”


Here are five things to know about demand rates:


     Customers can save money. In 2013 and 2014, APS studied 977 customers who switched to the current demand rate plan and stayed on it for at least one year, and 90 percent saved money on their summer bills. More than half saved an average of $49 monthly. Customers who shift their energy use to off-peak hours and stagger the use of major appliances during on-peak hours can reduce peak usage and lower their bills.


     The price customers pay for energy is lower. To accommodate the peak usage charge as part of a customer’s bill, APS is reducing the price for each kilowatt-hour of energy used. For example, customers on APS’s current demand-based rate pay less for energy in the summer (8.9 cents/kWh on-peak) compared to the most popular time-of-use rate plan (24.5 cents/kWh on-peak).


     Demand rates unlock new home technologies. While customers can save with demand rates by making small changes in how and when they use energy, they also can increase savings by adopting technology that cuts peak usage even more. Peak-reducing technologies range from programmable thermostats and load controllers to high-efficiency HVAC systems and pool pumps, west-facing solar panels, advanced solar inverters and energy storage paired with rooftop solar systems.


     Demand rates are understandable. Peak usage is averaged over 60 minutes, starting at the top of each hour and only during on-peak hours, noon-7 p.m. on weekdays. Customers do not have to worry about any one moment of energy use. In the rate review filing, APS is requesting to add two off-peak hours and move the on-peak period to 3-8 p.m. on weekdays because the summer peak time is moving later in the day. This change will help customers save with more hours of lower-priced energy.


Customers can find their home’s peak usage number by accessing their account at or on the APS mobile app. A customer’s peak usage number and total energy usage are typically updated within 24 hours for each day.


     Demand rates encourage customers to reduce their peak usage. In Arizona, the highest energy usage happens in the late afternoon and early evening, when air conditioners are running and people are coming home from work and school. Lowering peak usage during these hours can help avoid costs for higher-priced energy and infrastructure needed to meet the demand, creating savings for everyone in the long term—a win-win for customers and the utility.


APS serves about 2.7 million people in 11 of Arizona’s 15 counties, and is the Southwest’s foremost producer of clean, safe and reliable electricity. Using a balanced energy mix that is nearly 50 percent carbon-free, APS has one of the country’s most substantial renewable energy portfolios, and owns and operates the Palo Verde Nuclear Generating Station, the country’s top power producer and largest producer of carbon-free energy.  The company is also a proven leader in introducing technology and services that offer customers choice and control over their energy consumption.  With headquarters in Phoenix, APS is the principal subsidiary of Pinnacle West Capital Corp. (NYSE: PNW).​
​​​"Our current demand rate plan continues to grow and has increased 33 percent in the past six years. Demand rates offer customers more ways to manage their energy use and save money."
​- Stacy Derstine, Vice President of Customer Service and Chief Customer Officer