smart spending

Save on electricity with off-peak rates

"Turn off the lights!"

"Shut the door. The air conditioning is on!"

These familiar refrains echo through the halls of many American homes with children who don't know about the costs of electric service.

But did you know that the time when you use electric appliances can save you more money than how often you use them? 

Parul Goel, a working mother of two young daughters, found out her electric company charges five times less for electricity during off-peak hours. So like any frugal-minded consumer, she decided to "buy" her electricity when it was on sale.

June's Frugal $ense winner: Parul Goel
Parul Goel, of Metuchen, N.J., won $100 for submitting the following tip:

Zapping electricity costs
"I used to receive an electric bill from my energy company every month. I noticed that there (were) two rows in this bill -- one for off-peak usage and the other for 'on-peak' usage. I also noticed that the off-peak price is almost 40 percent of the on-peak price. When I called the electric company, they explained that they offer reduced rates for off-peak hours, which are from 9 p.m. to 7 a.m. on weekdays and 24 hours on weekends. Since I load my dishwasher every day, I started to run it only at off-peak hours during weekdays, and to wait till 9 p.m. is not an effort at all. I also started doing my laundry on weekends and in emergencies on weekdays, again at night."

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Bankrate: How did you find out about the difference in rates?

Parul Goel: I was going through my monthly bills from PSEG (Public Service Enterprise Group), and I noticed there were two rows on it -- on-peak charges and off-peak charges -- and I saw that my off-peak usage was very, very low. So I called them up, and I asked them what is the difference between these charges?

Bankrate: Were you surprised by what you found out?

Parul Goel: Absolutely! I didn't have to sign up for any program. It came as a standard package, but they don't tell you about it. You call them up and ask them questions, and that's when they tell you that there is off-peak usage from 9 p.m. to 7 a.m. and you'll be charged five times less.

Bankrate: What did you do with this newfound knowledge?

Parul Goel: I never used to think about timing. I would load the dishwasher and then start it right away. And the same thing (with) laundry. Now knowing that off-peak usage is five times cheaper, I wait till 9 p.m., and this is not a problem at all. So I would load it at night and then just turn it on at 9 p.m.

Bankrate: How much did you save by waiting?

Parul Goel: I almost saved $30 every month. It's month after month, and it's not that you're doing something special. And after 12 months, you have $360. So for waiting for a couple of hours at night, you save a couple of hundred dollars a year.

Bankrate: But doing laundry at 9 p.m. at night? Isn't that hard to arrange?

Parul Goel: Actually, I found out that off-peak also applies to the weekends. So only in emergencies do I do laundry at night; most of the time I do it on the weekend.

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