Brian Kurtz
Senior Manager, Special Projects & PMO, PSEG Long Island
Nayan Parikh
Senior Manager of Technology, PSEG Long Island
First Published Q3 2025
The story of our transition to time-varying rates at PSEG Long Island is one of immense collaboration, technology innovation and a maniacal focus on the customer experience. After all, when you fundamentally change how people pay for electricity, you have to get it right. We’re incredibly proud of the positive change this has brought to the residents of Long Island and the Rockaways, and now we’re excited to share our blueprint with you.
Starting Small: The Pilot Program Success
The history of this major shift began with a shared vision. Back in December 2021, in partnership with the Long Island Power Authority (LIPA), we announced a roadmap to make Time-of-Day (TOD) rates the standard for all 1 million of our residential customers.
This wasn’t just a simple tweak. It would eventually become the first standard, time-based, opt-out rate structure for residential customers in New York State. Our motivation was simple: achieving efficiency, cost-savings, and environmental goals. By encouraging customers to use less electricity during those few high-demand peak hours, they could save money, and we could run a much more efficient grid.
While there are examples of utilities moving straight to a default program, we started with an opt-in one year pilot program. Through intense research and personalized marketing, we enrolled over 15,000 customers for voluntary Time-of-Use (TOU) rates, which was more than double our original goal. The results were fantastic: customers lowered their bills by an average of 10 percent and, crucially, shifted 4 to 5 percent of electricity load out of the peak, both of which were clear wins!
Big Vision, Big Hurdles: Modernizing a Legacy System
A project this large always comes with challenges. For us, one of the biggest hurdles was technical.
For a project of this magnitude, you may quickly realize that your systems just aren’t equipped to support this level of innovation. For us, the main culprit was our 50-year-old legacy mainframe customer billing system (CAS), which simply couldn’t handle the complexity of interval data. To run the new advanced rates, we needed to use the 15-minute interval data from our AMI meters, and the CAS wasn’t built for that.
We could have gone for a full rip-and-replace but that would be incredibly expensive and would set back our rate modernization effort, potentially for years. Instead, our solution was to bring in GridX for a rate modeling and billing solution. This partnership allowed us to accurately calculate the complex time varying rates and feed that essential information back to every system and customer touchpoint: CAS, MyAccount, our Mobile App, the Data Warehouse, and our Customer Service and Billing teams. We successfully switched this highly intricate system from a simple register read to 15-minute data and interval billing, redesigned processes, developed rate comparison models, and shared this information across all customer- and employee-facing tools for a single source of truth and seamless experience.
With the pilot a success, it was time to further execute on our vision: migrating the rest of our customers to TOD rates (a standard 2-period TOD Off-Peak rate and an optional 3-period TOD Super-Off-Peak rate).
The technical complexity only grew, especially with added challenges with data-rich interval billing, the addition of shadow bill calculations and specialized segments like Net Meter TOD banking (moving from one generation bank to two or three) and Community Distributed Generation complex billing. This entire effort was rolled out across nine bundled releases, requiring significant changes to our internal operations.
“A project this large always comes with challenges. For us, one of the biggest hurdles was technical. We could have gone for a full rip-and-replace but that would be incredibly expensive and would set back our rate modernization effort, potentially for years. Instead, our solution was to bring in GridX for a rate modeling and billing solution.”
Inspiring Customers to “Shift and Save”
From day one, the customer experience was our north star. Our research told us two things were essential for a successful opt-out program: Personalized Rate Comparisons and Guaranteed Bill Protection (which guarantees customers a credit for up to one year if they would have saved more on the flat rate).
We also knew that personalized marketing and getting well ahead of communicating this change was critical to success. So, our marketing team developed the “20-Hour Energy Deal” message framework, which connected energy use and rate information, and ensured that customer messaging was easy to understand and motivational.
With the messaging established, we launched a massive 360-degree engagement campaign, encompassing just about every possible customer touchpoint, including email, direct mail, videos, digital ads, social media and robust website content. The communications were tailored for different customer segments.
In terms of direct outreach, customers received personalized direct mail and emails 120, 90, 60, and 30 days before their migration date. We then mailed a Time-of-Day Welcome Kit just prior to the rate change, which provided details of the program with tips on how to save during peak times, as well as a cling that people could hang as a reminder of peak hours and how to save. Following the rate change a “nurture” educational and behavior reinforcement series was emailed to customers over a five-week period.
We made it incredibly easy to act, too. Communications included “1-click” no log-in links and QR codes for customers to take early action, including a “1-click” for opting out. This approach was highly successful. Email open rates were well above industry standards (20-30%), generating over 515,000 website views and approximately 200 million customer impressions. Due to this clear, integrated strategy, 81% of the surveyed customers migrated to TOD rate are aware of PSEG Long Island’s rate plans including TOD.
To keep the momentum going, we launched appliance disaggregation with a personalized portal and monthly emails. These personalized emails give customers TOD insights based on their rate and individual household usage, identifying the top two shiftable appliances that were still being used during peak times in their home, and offering individualized tips on how to “shift and save”. For customers that kept peak usage low, they would receive a “kudos” good job message to continue to reinforce good energy and cost savings practices.
The Results: An Industry-Best Retention Rate
The early results confirm that this large-scale, revolutionary project is a massive success. As of November 2025, we’ve migrated more than 800,000 customers into the TOD program, achieving an industry-best-in-class retention rate of 96%. We anticipate having over 900,000 on TOD rates by the end of the year.
Our sophisticated customer engagement strategy also helped us avoid operational nightmares. A major surge in call center volume was thwarted because 87% of customers opting in and 51% of customers opting out did so through self-serve channels. Due to our focus on quality assurance, efficient operations and the numerous system enhancements put in place over the course of the project, the complex transition to interval billing resulted in a low, steady rate of billing exceptions at only 0.5% of bills.
Most importantly, customers are indeed “shifting and saving”:
On the busiest peak load days, the average customer has shifted 2% of their load.
EV customers, who historically had high peak hour usage, shifted and saved the most, decreasing their peak usage by 3–4% throughout the first summer on the rate.
The most engaged customers (those who opted in early or upgraded to the Super Off-Peak rate) achieved the greatest results, shifting their electricity usage by 5%.
Our full-population opt-out TOD program is a first for the northeastern United States and is set to become a blueprint for other New York State utilities. We couldn’t be prouder of our team. Our focus on technical accuracy, a personalized customer experience, and internal readiness offers key insights for any utility looking to execute a similar load-shifting and modernization program.
If your utility is getting ready to undergo a similar transition, we’d be more than happy to talk about our experience.
“The early results confirm that this large-scale, revolutionary project is a massive success… Our sophisticated customer engagement strategy also helped us avoid operational nightmares… Most importantly, customers are indeed ‘shifting and saving’.”
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