how does a tiered rate system alter energy usage?

A tiered rate system is a pricing structure that charges different levels of prices depending on the amount of electricity a customer uses. This system incentivizes energy conservation because customers are charged progressively higher rates as they use more energy, thus encouraging them to conserve energy and use efficient technologies. In other words, the more electricity a customer uses, the more they are charged for it. Customers become more aware of their energy usage when they are paying more for higher levels of usage, which in turn can lead to lower energy usage and greater energy efficiency.