2023 LADWP Electric Rates: Why is My Utility Bill So High?

The Los Angeles Department of Water and Power announced adjustments in LADWP rates effective January 1, 2023. This is likely why homeowners and property administrators have noticed changes in their monthly utility bills.

Is your LADWP bill too high? If you’re among the many wondering about the hike in utility bills, our solar panel company breaks down the updated cost of electricity in Los Angeles and surrounding areas—allowing you a better understanding of the situation. We also suggest a range of residential and commercial solar solutions to ease the LADWP electricity rates you pay for.

A Rundown of 2023 Changes in LADWP Electricity Rates

We’ve heard it many times recently—“Why is my LADWP bill so high?” Changes in the cost of electricity in Los Angeles are more apparent to homeowners because the adjustments in power rates affect Standard Residential Rate plans as well as Time-of-Use Residential Rate plans. On a related note, the rate increase affects all four tiers of utility bills for water usage. Let’s dive into each one.

Standard Residential Rate

This is the one-size-fits-all residential rate that generally remains consistent throughout the year. It can spike on hot and humid summer days but is guided by a flat price based on various factors, including the following:

Location: Zone 1 is for cooler areas, and Zone 2 is for hotter areas
Season: The high season is from June to September; the low is from October to May
Consumption Tiers: Tier 1 is for basic lighting, heating, and refrigeration units. Tier 2 is for additional appliances. Tier 3 is for combined Tier 1 and 2 units

LADWP electric rates are calculated at a flat price per kilowatt hour. The LADWP cost per kWh varies for Zones 1 and 2 and increases based on individual consumption tiers.

Additionally, LADWP power rates are affected by a Power Access Charge—a fixed monthly charge that depends on a household’s highest tier of energy use in the previous year. The PAC can decrease when a household lowers its energy use for the year.

Time-of-use Residential Rate

There is also a change in LADWP electricity rates for Time-of-Use rates, which can fluctuate depending on LADWP peak hours. Unsurprisingly, they cost more during peak hours, when LADWP has to generate more power to accommodate the demand. As such, households can take advantage of lower energy costs during off-peak hours.

LADWP peak periods can be divided into three:

High Peak Period: LADWP peak hours include 1:00 PM to 4:59 PM from Monday to Friday, totaling 20 hours per week
Low Peak Period: This includes 10:00 AM to 12:59 PM and 5:00 PM to 7:59 PM from Monday to Friday, for a total of 30 hours per week
Base Period: This period refers to 8:00 PM to 9:59 AM from Monday to Friday and all of Saturday and Sunday, for a total of 118 hours per week

Electricity usage during the high peak period results in the highest LADWP electric rates, while the least expensive time for energy consumption is during the base period.

Your household might be suitable for the TOU Residential Rate if your utility bills show consistent Tier 3 usage or if you’re enjoying the benefits of solar power at home and continuously accumulating solar credits for your LADWP solar billing.

Residents on the Standard Residential Rate may switch to TOU Residential Rate during off-peak hours for the central AC system, electric space heaters, spas, swimming pools, and fish ponds. These could help lower your average electric bill in Los Angeles regions.

Water Rates

These rate aren’t the only thing that experienced some changes this year.

Water rates are measured by consumption and meter size. For the latter, the more cubic feet of water a meter measures, the higher the water bill will be. The overall pricing structure includes four tiers:

Tier 1: This includes basic indoor use
Tier 2: This involves average outdoor use
Tier 3: This is for above-average outdoor use
Tier 4: This refers to excessive or the most water usage

Water rates will remain as is for Tiers 1 and 2. However, the Tier 3 rate increased by $1.244, and Tier 4 increased by $3.602 this year.

Discounts on LADWP rates

LADWP power rates and water rates are available to single-family homes, single-family homes with a guest house, individually metered residential properties, and separately metered residential condominiums and cooperatives. Utility rate discounts are available to residents who qualify for any of these factors:

Electric vehicle discounts
Low income
Lifeline
Solar or wind power generation

As such, investing in residential solar panel installation is not just the more energy-efficient solution—it also helps you save on LADWP electricity rates in the long run. This has become even more beneficial because of the Inflation Reduction Act, which makes solar power even more financially advantageous for American households.

A Solution to Help Ease the Cost of Electricity in Los Angeles

The average electric bill in Los Angeles ultimately depends on the energy consumption of every household. Regardless of your average power usage, one effective way to reduce your total utility costs is through solar power.

Solar panel installation and solar NEM 3.0 reduce carbon footprint, increase property value, and provide solar tax credits to benefit your LADWP solar billing.

Your home solar panel system can charge during off-peak hours—when you can use electricity at the lowest LADWP electric rates. Meanwhile, if you have a rooftop solar system that is connected to the LADWP energy grid, you can sell excess solar energy through net metering.

Let’s Discuss Solar Energy Today

AMECO provides trusted residential and commercial solar panel installation services in California. Our experts can walk you through the process and benefits so you can maximize the benefits of solar and minimize your overall LADWP power rates.

Contact us today so we can estimate your solar panel needs!