FAQ: Rates and Tiers

What is tiered billing?

CFE is like many utility companies; they have a rate structure that varies with usage in order to promote conservation. What this means is that heavy consumers pay more, a kind of reverse incentive. In the case of CFE, there are several levels or tiers of usage and the price per Kw/h (kilowatt-hour) goes up with each tier reached. There are different scales for residential and commercial users. The official explanation can be found here.

What is this “DAC” that I’ve heard about?

Nothing brings fear into the eyes of electric consumers more than the dreaded “DAC”. The acronym stands for Domésticas de alto consumo or essentially high usage homes that are paying commercial rates because of their consumption. If you use a lot of electricity and go up through all the tiers into DAC rate, it’s going to hurt for a while. The CFE uses a sliding calendar scale to calculate this; sort of like a sliding window on an annual calendar. So once you get into that six-month window it’s going to take six months to come out the other side, even if you immediately lower your consumption. Make no mistake; DAC rates are high and this is not a place you want to be unless you have a whole lot more money than I do.

Is it true that CFE subsidizes some bills?

Yes it is. Recognizing that one of the biggest contributors to electricity usage is air conditioning, and that air conditioning also happens to be very necessary to stay alive in some areas in the hot season, CFE allows a geo-sensitive subsidy to be applied during the high season. This subsidy varies by location with the hottest locations receiving higher subsidies. You’ll see this “Dómestica” rate on your bill and it will be 1, 1A, 1B, 1C, 1D, 1E or 1F.