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Page added on September 21, 2014
‘Time-of-Use’ Electricity Pricing
My mom is a pro at shopping for good deals. She taught me the importance of timing my purchases during the off-peak season to get the most value for my dollar.
Time-of-Use (TOU) electricity pricing reminds me of the lessons my mom taught me, and it can help empower families to take control of their energy use, while saving money AND improving air quality.
Like the name implies, TOU pricing allows customers to choose when to power-up large appliances (think laundry, dishwasher, A/C) in order to avoid using high-demand, “peak” energy – which is more polluting and expensive. It is a voluntary program with a proven track record.
Peak energy demand typically occurs late in the afternoon when everyone is coming home from school and work, running the A/C, charging phones, cooking, doing laundry, or streaming Netflix on a T.V. During this high-demand time, energy prices spike and electric utilities flip on expensive and dirty fossil fuel “peaking” power plants to meet energy demand (because nobody wants to lose power and heaven-forbid the Internet!).
We all know something is most expensive when everyone wants it at the same time. Why not hold-off on a purchase until the rush ends to save some money? Timing your energy use during off-peak times allows you to use cheaper electricity. Even better, you can time your energy use to take advantage of peak sun, when California’s solar panels are humming; or late at night, when our wind turbines are spinning. You’ll be making smart choices, saving money, AND helping clean the air.
Mom would be proud!
Still need convincing? Want to learn more?
My colleagues at EDF put together a terrific primer on Time-of-Use electricity pricing. Here are three ways TOU can help California make smarter, healthier energy choices.
Lower Electricity Bills
TOU gives people options to save by conserving and shifting energy use to cheaper times of the day. By paying more attention to the timing of energy use, Californians could have a new means of lowering energy bills and reducing the use of costly, polluting power plants. In fact, because peaker power plants run so infrequently and inefficiently, EDF estimates that if half of all Californians participate in TOU, electric utilities and customers could save nearly $500 million annually.
All Californians, including low-income families, have much to gain from TOU because it is a customer-focused program. For example, Washington D.C. initiated PowerCents DC, with nearly 900 residents, including low-income households, to test responsiveness to TOU pricing and to see how smart thermostats could help residents save money. The results showed nearly all participants (regardless of household income) saved money and responded favorably to the program. Sacramento Municipal Utility District (SMUD) launched a similar program, and the vast majority of participants either paid the same amount as before or saved money through TOU. With the right customer education programs and built-in safeguards, proactive Californians could easily replicate this outcome.
Freedom of Choice
TOU puts people in the driver’s seat, empowering them to make energy choices – if they choose to. As California’s electric utilities expand the use of TOU rates in the coming years, customers will have the option to opt-in or opt-out, effectively choosing how they want to pay for electricity. When SMUD implemented TOU pricing, people reported greater satisfaction with this plan compared to existing electricity rates, noting that TOU provides “fairer pricing” and “more opportunities to save money.” From an economic, health, and environmental perspective, EDF encourages Californians to choose TOU, as this program will open the door for other clean energy resources like rooftop solar and smart thermostats.
Clean, Healthier Air for All
TOU could bring relief to communities located near power plants, as they bear a significant health burden from breathing in toxins from these facilities. Power plant emissions have been linked to premature death, aggravated lung and heart disease, bronchitis and asthma (especially in children), and an increased number of missed school and work days. With TOU, California has the tools at hand to protect air quality and help businesses and families save money without reducing the reliability of the electric grid.
13 Comments on "‘Time-of-Use’ Electricity Pricing"
Davy on Sun, 21st Sep 2014 8:37 am
Good luck with that. A good idea that will probably go nowhere until it is too late and the grid is unstable. You can’t influence attitudes with cornucopian talk that says “all is well” and “happy days are here again” then tell people they have to practice sacrifice. It is one of those “double binds”:
A double bind is an emotionally distressing dilemma in communication in which an individual (or group) receives two or more conflicting messages, and one message negates the other. This creates a situation in which a successful response to one message results in a failed response to the other (and vice versa), so that the person will automatically be wrong regardless of response. The double bind occurs when the person cannot confront the inherent dilemma, and therefore can neither resolve it nor opt out of the situation.
http://en.wikipedia.org/wiki/Double_bind
Chris Hill on Sun, 21st Sep 2014 8:48 am
Things like this work great, until everyone does them. When that happens, the peak time moves or money is no longer saved.
Nony on Sun, 21st Sep 2014 9:03 am
I’m in favor of this. Industrial customers already pay for this. In the end of the day, all the utilities costs will be picked up by customers (no free lunch). So we might as well incentivize energy saving when the cost is highest (peak times or even peak “days”). We need the price mechanism. There’s no loss for consumers since they end up paying for everything in the end anyhow.
forbin on Sun, 21st Sep 2014 9:06 am
ok if yer rich , mate
Here are three ways TOU can help California make smarter, healthier energy choices.
Sure !
1, Lower Electricity Bills – Hey I’m Bill Gates/ Larry Ellison – I brought Solar – so this is for you plebs !
2, Freedom of Choice – see point 1
3, Clean, Healthier Air for All – good ! about time you plebs stopped polluting my clean air with your dirty coal …
oh and the grass needs cutting – get too it and be glad you have a job
/sarc off
Forbin
PS: cant anyone else see this hits the poor more than the rich ?
Personal Carbon Quotas might be better – ones you cannot transfer……
Nony on Sun, 21st Sep 2014 9:06 am
Chris, smoothing the load has benefits because peaking plants have less efficiency than baseload. Also, it enables capital savings on the grid, which can be sized for smaller peak loads.
Makati1 on Sun, 21st Sep 2014 9:31 am
Then there are those who manage quite well without electric. From an article I just read and which sums up my thoughts exactly:
“…I would rather live surrounded by the exciting chaos of birth that is Asia, than the struggling chaos of death that is the West…”
“What a Simple Cambodian Girl Taught Me About the Entrepreneurial Spirit”
http://capitalistexploits.at/2014/09/what-a-simple-cambodian-girl-taught-me-about-the-entrepreneurial-spirit/
Move down the ladder at your own pace instead of waiting to have it pulled out from under you. ^_^
Doug Marker on Sun, 21st Sep 2014 9:56 am
Since I changed my PG&E plan to time of use, my electric bill has decreased, even though I am using more electricity. Keep in mind this is a voluntary program. I am thrilled to be helping limit the use of peaking power plants, and it doesn’t hurt that my electric bill is lower.
ghung on Sun, 21st Sep 2014 10:03 am
California utilities have been fighting net metering and TOU metering for some time, even holding up some installations. At issue is solar producers who are selling their surplus production at peak prices, particularly systems with battery backup, some charging their batteries at off-peak prices and selling back to the grid during peak, despite that many utilities are building storage to do the same thing. Some background:
h ttp://www.greentechmedia.com/articles/read/breaking-the-logjam-on-10mw-of-california-solar-storage-projects
“December 4, 2013 …. Since this spring, those utilities have been requiring any net-metered solar power projects that include batteries to go through a lengthy and expensive process to prove their batteries aren’t feeding stored grid power back to the utility, while getting credited for delivering green, solar-generated electrons.
This has left some installers and customers unable to interconnect their solar-storage systems to the grid and start earning a return on their investment. It has also stalled many more projects that don’t pencil out economically under the extra costs that utilities are imposing, a fact that’s driven companies including SolarCity, Sunverge, Outback Power, and others that are installing energy storage alongside solar power systems to demand a change.
Seems an agreement has been reached grandfathering in systems installed no later than July 1, 2017 for 20 years:
h ttp://blog.sfgate.com/energy/2014/03/27/california-regulators-to-extend-solar-net-metering/
…”“This proposal would be a good outcome,” said Susannah Churchill with the Vote Solar advocacy group. “California solar homeowners and businesses can move forward with certainty. What we wanted was to make sure the rules would stay fair for customers who had already made an investment in solar, to the benefit of all of us.”
So what will the next version of net metering look like? The commission has not yet decided. That fight still lies ahead.
UPDATE: The commission approved the 20-year grandfathering period Thursday morning. “With this decision, the Brown Administration is sending a clear message that California will always be a solar friendly place,” said Brad Heavner, Policy Director of the California Solar Energy Industries Association.”
JuanP on Sun, 21st Sep 2014 10:37 am
Mak, nice story. Thanks. I use hobo fishing kits like the one described all the time, and fish like that sometimes, too, using goggles, and drifting along my raft with the tides and winds. I have hobo fishing kits on all the islands I visit regularly, and I also carry them on me always. Just a small drink bottle, beer can, or piece of wood or PVC with enough line to throw, a hook, and some weight. Dig some worms and sit on the hammock by the shore waiting for dinner to bite, then grill the fish, campfire, and to the hammocks for a good night’s sleep. I’m headed there in a couple of hours with my wife and coming back tomorrow morning.
Davy on Sun, 21st Sep 2014 10:56 am
Juan, on the Missouri River we call em drift lines. Very popular here.
Apneaman on Sun, 21st Sep 2014 1:57 pm
Post-nuclear grid withstands heat wave
http://www.utsandiego.com/news/2014/sep/21/resilient-post-nuclear-grid/
Yeah, but for how long? The heat waves and are only going to become more frequent and water stress is a major problem. The headline say’s a lot. We never used to brag about utilities so why the reassurance from a newspaper? The people of San Diego should read this post.
Norm on Sun, 21st Sep 2014 4:26 pm
I love watching the sheeple display their massive technical ignorance. peak demand caused by everybody come home to charge their cellphone? Ya right, OK. i guess my cellphone charger is a massive consumer of power. It uses more energy than the clothes dryer. OK.
Another one, the sheeple are now afraid to use a plastic grocery bag. Its got what, maybe 1 gram of hydrocarbon in it? But they think nothing of their 2 gallons of prime fuel they burnt up in the Escalade… driving to get the groceries.
What would the aliens think.
Makati1 on Sun, 21st Sep 2014 8:24 pm
JuanP, you know how to live. I’m anxious to get to the farm and spend some lazy days down by the river. I spent most of my childhood fishing and swimming in the creeks and rivers nearby.
Then I got too busy raising a family and gave up fishing as a ‘waste of time’. Typical capitalist American. Missed some of the best parts of life chasing the dollar and collecting “stuff”.
Now I have all the time I need to do the ‘enjoy life’ thingy. I think it will add years to my life and happiness to my years. Enjoy your lazy days!
P.S. My Ex wouldn’t even touch a worm if she was starving. Part of why she is now my Ex. ^_^