Electricity regulators, clean energy innovators, and rappers have all lamented poor communication. And some have pushed for cleaner, cheaper, more reliable solutions for meeting our energy needs. This is particularly so with the much anticipated emergence of a new kind of non-event based, price-responsive demand response (DR), or flexible DR.
Whereas traditional DR signals customers to voluntarily and temporarily reduce their energy use at times when the electric grid is stressed, this type of DR does that and more. The big difference? It signals customers, their appliances, and their electric vehicles to increase their energy use when electricity is clean, plentiful, and cheap.
For example, electric vehicles can be programmed to charge at mid-day when the sun is bright and solar energy is at its peak, and use that stored energy when the sun sets. Better yet, many of our cars, homes, and appliances can be programmed to monitor grid conditions in real time, via the Internet, and respond accordingly by charging or defecting. Also known as a “set-it-and-forget-it” feature, this function enables the seamless integration of flexible DR while also supporting the full potential of energy efficiency measures and distributed energy resources (DERs), like rooftop solar and energy storage. Read More
This summer the California Public Utilities Commission (CPUC) ordered big changes in how Californians will pay for electricity. Starting in 2019, residential customers of the big three investor-owned utilities (Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric) will be switching residential customers to the same pricing plan used by commercial and industrial customers: time-of-use (TOU) electricity pricing. This approach rewards people who shift some of their electricity use to times of the day when renewable energy is plentiful and electricity is cheaper. Before rolling this out to all 33 million Californians, however, the CPUC has instructed the utilities to perform experiments on how best to design and then market TOU pricing to customers.
These TOU pilots – which will begin summer 2016 – are the first steps in the journey toward full deployment, and as with other journeys, the first steps are often some of the most influential. Read More
Anybody managing a household budget knows it pays to plan ahead. With advanced thinking we can buy favorite items with coupons, when they’re on sale, in bulk, or at the cheapest store in the area. Similarly, we know that buying under duress, or in the touristy spot, will likely mean higher prices. Using the same smart shopper skills, new changes to the way utilities charge for electricity are going to give Californians another way to save money on energy bills.
In the current system, most California households’ electricity prices don’t change throughout the day. There is no option for lower prices when system demands are lower and electricity is cheap in wholesale markets. But that’s about to change, thanks to a recent 5-0 decision by the California Public Utilities Commission (CPUC).
Starting January 1, 2019, after a period of study, public outreach, and education, California’s large investor-owned utilities (Pacific Gas and Electric, San Diego Gas and Electric, Southern California Edison) will switch households to time-of-use (TOU) electricity pricing. Read More
Here at Environmental Defense Fund (EDF), we love win-win solutions. This is why we’re big fans of time-of-use (TOU) electricity pricing (a type of time variant electricity pricing). As I’ve written before, TOU pricing better reflects the true cost of electricity, which fluctuates throughout the day. What’s more, it brings with it significant benefits for the environment, electric reliability, and people’s wallets. By empowering customers to better control their energy bills and reduce our reliance on fossil fuels, everyone wins with TOU pricing.
Thankfully, the California Public Utilities Commission (CPUC) included TOU pricing as one of the key elements in their plan to reform residential electricity rates. But how and what Californians pay for electricity – the best way to structure rates – is currently up for debate at the CPUC.
The CPUC issued its proposed decision on restructuring California’s residential rates and moving customers to TOU rates in the new structure, which EDF strongly supports as an evolutionary leap forward. Subsequently, Commissioner Mike Florio issued an alternate proposed decision that nudges the current tiered rate system forward with a time-variation “adder.” Unfortunately, Florio’s alternate proposal amounts to more of a tune-up than the substantial overhaul required to prepare for a future grid that runs on carbon-free renewables, like wind and solar, and also powers our cars, trucks, trains, and boats. Read More
Last week, the California Public Utilities Commission (CPUC) issued a proposed decision on residential rate reform. Residential rate reform – how and what Californians pay for electricity – is a thorny subject, and the Commission’s proposed decision is being met with a range of reactions.
We at Environmental Defense Fund (EDF) want to highlight a bright spot in the 300-page document that we’re thrilled about: the attention paid to time-of-use electricity pricing (a type of time-variant pricing). Buried in this long legal document, we see EDF’s fingerprints in the Commission’s call for California investor-owned utilities to ramp up their use of this innovative yet well-proven pricing tool starting with pilots in 2016 and going to scale in 2019.
How TOU Works
If you’ve been following EDF’s work in this area, then you know we’ve been involved in this process for many years and have probably gathered that we’re big fans of time-of-use pricing (TOU) because it better reflects the true cost of electricity, which fluctuates throughout the day. This type of pricing also empowers customers to better control their own energy bills and reduce our reliance on fossil fuels.
TOU pricing works by breaking up the day into two or three large intervals and charges a different price for each. Rates can be divided into off-peak prices (generally during the middle of the night to early morning), semi-peak prices (daytime and evening), and peak prices (occurring during periods of highest demand, usually afternoon to early evening). These rates remain fixed day-to-day over the season.
Back in January when Google announced it would spend $3.2 billion to purchase Nest, EDF knew this was a company to watch. The results of three new reports, released today, confirm that controllable thermostats like the Nest Learning Thermostat are both customer-friendly and useful for energy system planners. Moreover, the reports signal that smart devices, such as those Nest manufactures, have potential for generating marked savings for utility customers.
The reports analyze 2012-2013 energy use data gathered from four major utilities across the U.S. that offer Nest energy services programs: Austin Energy, Reliant Energy, Green Mountain Energy, and Southern California Edison.
The first report evaluates the results of Rush Hour Rewards, a demand response service that changes the temperature of the homes of Nest users during energy “rush hours”, or times when demand on the grid is highest. The second examines Seasonal Savings, a program that runs for three weeks and slowly modifies the temperature according to the customer’s behavior (which this smart thermostat is able to ‘learn’ via its built-in motion sensor and understanding of its owner’s temperature preferences). Both operate during times of heavy usage, namely winter and summer. The third report analyzes home energy data of Nest customers more broadly, comparing energy use before and after the installation of a Nest Thermostat. Read More