LADWP Tiered vs. Time-of-Use: Which Rate Is Actually Cheaper? (2026)

LA Energy Math · Updated August 5, 2026

Most LADWP customers don’t know they’re on a tiered rate, don’t know a time-of-use option exists, and have never been shown the one number that decides between them: their marginal cost per kWh. This guide fixes all three.

How LADWP’s default rate (R-1A) actually works

Unlike SCE or PG&E, where time-of-use is now standard, LADWP’s default residential rate — Schedule R-1A — prices electricity by volume, not clock time. Use more, and each additional block of kWh costs more:

• Tier 1 (low season 2026): ~24.4¢/kWh — your first allowance of usage
• Tier 2: ~30.2¢/kWh — the next block
• Tier 3: the top block, at a higher rate still

Three things most explainers get wrong:

1. You’re billed bi-monthly. Nearly all LADWP residential accounts get a bill every two months, so tier allowances are effectively doubled per bill. (LADWP bills also bundle water and sewer — when comparing electricity costs, always work from kWh, not the bill total.)
2. Allowances depend on your zone. Zone 1 (most of LA) gets 350 kWh/month of Tier 1; Zone 2 (hotter inland areas, including much of the San Fernando Valley) gets 500. Your zone is printed on your bill.
3. The advertised rate isn’t what you pay. Add the 10% Los Angeles utility users’ tax on the whole bill, a small state surcharge, and a fixed “Power Access Charge” (~$45 per bi-monthly bill) that you pay regardless of usage.

That 10% tax is why your true marginal rate — what the next kWh actually costs you — is higher than any number on LADWP’s rate card. A Tier 2 kWh at 30.2¢ really costs you ~33.3¢. That marginal number is the key to every energy decision you’ll make: it’s what a saved kWh is worth, what a solar kWh is worth, and the benchmark TOU has to beat.

(Seasons matter too: June–September “high season” has different rates and allowances than October–May. And rates have been climbing — Tier 1 rose roughly 8–11% from 2025 to 2026 through LADWP’s quarterly pass-through adjustments.)

How the TOU option (R-1B) works

LADWP’s optional time-of-use rate flips the logic: price depends on when you use power, not how much. The expensive window is weekday afternoons (roughly 1–5 p.m.); nights and weekends are cheapest. There are no tiers — heavy usage isn’t penalized, mistimed usage is.

One honest caveat: LADWP publishes its TOU prices far less prominently than its tier prices, and they change with the same quarterly adjustments. Before switching, get the current R-1B prices from your LADWP account and run your own numbers. Any article that quotes you an exact TOU price without a date is guessing.

Who wins: the decision table

Stay on tiered (R-1A) if you have solar with net metering. This is the big one. LADWP still credits your exports at roughly retail rates against your imports — flat, simple, generous. Moving to TOU makes the value of your exports depend on when the sun happens to shine versus when you consume. Solar households are the group with the least to gain and the most to complicate. Stay put.

Stay on tiered if your usage lives in Tier 1. You’re already buying LADWP’s cheapest electricity. TOU’s off-peak price won’t beat it by enough to matter, and its peak price will cost you every weekday afternoon.

Consider TOU if you charge an EV overnight and your usage reaches Tier 2 or 3. This is the profile TOU was made for. An EV can add thousands of kWh a year, all of it purchasable at the cheapest overnight hours — but on the tiered rate, those same kWh stack on top of your household usage and get billed at your worst tier, ~33¢ or more after tax. If a big chunk of your usage can happen between 8 p.m. and 8 a.m., price out R-1B — and ask LADWP about its EV-specific discount while you’re at it.

Consider TOU if nobody’s home on weekday afternoons. No solar, out of the house 1–5 p.m., laundry on weekends? You’d rarely touch the peak window, and every kWh you buy gets cheaper than tiered pricing once you’re past Tier 1.

The test to run before switching

Don’t switch on vibes; switch on arithmetic. Two numbers decide it:

1. Your current marginal rate. Find your top tier from your bill, multiply by 1.10 for the city tax. Tier 2 low-season ≈ 33.3¢. (Our bill analyzer does this from one number on your bill.)
2. The share of your usage you can move off-peak. Be realistic — A/C on a 95° Valley afternoon doesn’t reschedule.

If a large, movable slice of your usage (an EV, pool pump, laundry) can be bought overnight at a TOU price meaningfully below your marginal rate, TOU wins. If your usage is mostly fixed, daytime, or covered by solar, tiered wins. For most LADWP households — especially solar ones — tiered is the right answer, which is convenient, because it’s also the default.

FAQ

Is LADWP forcing everyone onto time-of-use like SCE did? No. LADWP is a municipal utility, not governed by the CPUC mandates that moved the investor-owned utilities to default TOU. R-1A tiered remains the LADWP default; TOU is opt-in.

Can I switch back if TOU doesn’t work out? LADWP allows rate changes, but confirm current terms with them before you switch — don’t assume an instant undo.

Why is my bill so high if the rates are ~24–30¢? Three quiet multipliers: the 10% city tax on everything, the ~$45/period fixed charge, and the bi-monthly cycle that makes each bill look double. Plus water and sewer riding on the same bill. Work in ¢/kWh, and check which tier you’re topping out in.

Rates verified August 2026 against real LADWP R-1A bills (Tier 1 $0.24362, Tier 2 $0.30221, low season) and LADWP’s published schedules. Not affiliated with LADWP. Education, not financial advice.