Maine lawmakers on Thursday began to dig into the details of how to charge less to electricity ratepayers who plug in an electric vehicle in the middle of the night or run a washing machine before breakfast.

The concept, called time-of-use rates, incentivizes people to use electricity at odd hours to reduce the load on the region’s electric grid. Reducing the load frees up the grid to accommodate greater use of electric vehicles, heat pumps and other electrification to replace fossil fuels. It would also reduce the need to upgrade or build costly transmission lines that are billed to ratepayers.

The rates are credited with deferring the need for power plants to meet peak demand. Users could charge batteries and electric vehicles at low rates and use the equipment as a power source during costly peak periods, which would also boost the market for storage technologies.

The legislation appears simple: clarifying the Public Utilities Commission’s authority to establish time-of-use pricing for standard-offer service, the most commonly-used rate. But drafting new rates is complicated and will take years to complete and market to the public, Maine’s top utility regulator told members of the Legislature’s Energy, Utilities and Technology Committee.

“The system is built to serve the peak,” Public Utilities Commission Chairman Philip L. Bartlett II said. “There could be one minute a day where electricity demand spikes and the entire system has got to be built to meet that one minute even if it’s an aberration.”

By reducing electricity use during peak times, which for Central Maine Power Co. customers is between 7 a.m. and noon and 4 p.m. to 8 p.m. on weekdays, utilities and ratepayers can see big savings in the cost of a grid build-out, he said.

Bartlett said devising a time-of-use regime and educating the public will be a “multi-year process.”

Time-of-use rates are available in Maine for the delivery side of electric bills, paying for transmission lines and to move electricity from generating plants to the grid. Delivery accounts for about half, or less, of a monthly bill. Signing up for time-of-use delivery rates can save a typical Maine household about $6 a month. But CMP and Versant Power say few residential customers participate.

The PUC reported in November 2023 that “sufficient information” is available to support a finding that carefully designed time-of-use rates are likely to shift load, reduce peaks and “thus meaningfully reduce overall costs for ratepayers.”

Regulators believe they may have the authority to order time-of-use rates for the supply side of electric bills, known as the standard offer, but they are asking the Legislature for clarification in interpreting state law, Bartlett told lawmakers.

The legislation does not establish or design time-of-use rates nor define how they would be put in place, said Rep. Gerry Runte Jr., D-York.

“These issues are all subject to an ongoing inquiry that began last August and ultimately will be the subject of further proceedings if indeed the commission decides to move forward with this,” he said.

Public Advocate Heather Sanborn said technology will be able to shift electricity use automatically “without us needing to do anything and without any negative impact on our lives.” As an example, she said, owners can plug in electric vehicles when they return home from work and the vehicles will charge several hours later, after peak time.

“This type of shifting of our electric demand represents a powerful potential tool for reducing every ratepayer’s costs by reducing our peak load,” Sanborn said.

At times of peak demand, the “dirtiest and most expensive generation resources” are dispatched, she said. And to be available during peak demand, generating plants using fossil fuels are paid to stand by and be available when they could instead be decommissioned.

Alf Anderson, associate state director for advocacy and outreach at AARP Maine, said the organization opposes the legislation because it will largely allow the PUC to establish its “stated intent to mandate time-of-use rates” for residential ratepayers. A proceeding initiated by state regulators advances their “preference to make this rate a default, or mandatory, rate for customers,” he said.

“This bill would effectively repeal a policy that’s been in place for decades and perhaps allow the commission to avoid a public rule-making process that would ensure a proper evaluation of facts and interests of all affected stakeholders,” Anderson said.

AARP Maine instead urged regulators to establish pilot programs and consider a range of different options. It called for voluntary, opt-in programs that would reduce peak electricity loads and reward customers for reducing electricity use at peak times.