B5.14 Time of use pricing
Lobby to base electricity prices on time of use to support more renewables on the grid by reducing demand at times of peak loads and low renewable production.
According to an email from Jim Lazar to the envirotalk mailing list a few years ago:
We now have a LOT of data on how people respond to careful electricity pricing. If the highest-load hours of the year carry a steep price, with people notified day-ahead that “tomorrow will be a peak day and rates will be 4X normal” we have found people will reduce usage on the peak hours of that day by up to 50%. This is important as we depend more on wind and solar, as there will be SOME days when neither is performing. Below are the peak demand results from 109 different rate design pilots (US, Japan, Korea, Europe) in electricity pricing. The simple time-of-use rates produced 5% to 10% reduction in peak electricity demand. Peak-time rebates (PTR), giving people credits on their bills if they reduce usage at key times generates 10% – 30% reductions in those periods. The advance-notice critical-peak pricing (CPP), actually charging 5X the normal rate during 10 – 50 hours per year, produced peak load reductions of up to 50% when combined with smart thermostats and other technology to make it easy for the consumer. People are willing to cut back when it really counts, if you give them the information, the technology, and the financial reward to do so.
