Author Archives: Jamie Fine

Residential Electricity Pricing in California: We Need an Overhaul, not a Tune-Up

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This post has been updated since its original publication on June 11th, 2015.

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.

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Posted in California, Clean Energy, Electricity Pricing, Renewable Energy| Read 2 Responses

Electricity Pricing: The Times, they Might be A-Changing

Electricity pylonsLast 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.

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Posted in California, Clean Energy, Electricity Pricing| Read 1 Response

People-Powered Pricing: Nudging Illinois toward Time-of-Use Electricity Plans

TOU graphic KOThis week I submitted testimony in support of a petition by the Citizens Utility Board and, my shop, EDF, to urge the Illinois Commerce Commission to require Commonwealth Edison (ComEd) and Ameren, two of Illinois’ biggest utilities, to provide families and individuals with new ways to reduce their energy bills: electricity pricing based on the hour of the day. This “Time-of-Use” (TOU) option provides times of the day when electricity will be much cheaper than the all-day, “flat” electricity pricing currently used today. Such electricity rates would reward energy-efficient customers and those who shift electricity use away from “peak” hours—when demand is high, prices skyrocket, and power plants produce the most pollution.

Our petition to the Illinois Commerce Commission, which is in charge of regulating electric utilities in the state, asks for ComEd and Ameren to offer optional rate plans beginning 2016. With voluntary TOU electricity pricing, families with digital meters can enjoy lower electric bills by running certain appliances, like the dishwasher, when electricity is cheapest, such as early in the morning or late in the evenings. However, the benefits go far beyond households that participate. Cutting energy use at high-demand times, like the afternoon, lowers electricity prices for everyone, reduces stress on the power grid, and offsets the need for expensive, polluting power plants.   Read More »

Posted in Electricity Pricing, Illinois, Smart Grid, Utility Business Models| Tagged | Read 6 Responses

Nest’s Promising Results for Reducing Peak Electricity Demand

Nest_front_officialBack 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 »

Posted in Clean Energy, Demand Response, Energy Efficiency, Smart Grid, Utility Business Models| Tagged | Read 1 Response

Preliminary Results Find Demand Response-Green Building Partnership is Off to a Great Start

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The preliminary results of the Demand Response Partnership Program (DRPP), a unique partnership launched by EDF and the U.S. Green Building Council (USGBC) in 2011, are now available in the 2013 DRPP Overview. Photo source: Harvard University.

Buildings account for 40% of our nation’s electricity use. In 2012, power plants spewed about 2 gigatons of global warming pollution into our air, which was about one-third of total U.S. emissions. That’s why EDF and the U.S. Green Building Council (USGBC) teamed up to launch the Demand Response Partnership Program (DRPP) aimed at increasing the participation from commercial buildings in host utility demand response (DR) and smart grid programs. Now, 2 years into the program, the preliminary results of this collaboration are available in our 2013 DRPP Overview.

DR is used to reduce energy use by rewarding utility customers who use less electricity during times of “critical,” peak electricity demand. Through DRPP, we leveraged relationships with the building community asking LEED projects to operate in low power mode when the grid is stressed. LEED ‘Pilot Credit 8: Demand Response’ has been developed as an incentive and implementation guideline.

This study evaluated three areas to measure the program’s success in 2013: Recruitment and outreach to potential participants, research and analysis of data from participants, and education about the DRP Program. A few key highlights are outlined in the Overview: Read More »

Posted in Clean Energy, Demand Response, Energy Efficiency, Renewable Energy, Smart Grid| Tagged , | Read 1 Response

How's Your Electric Bill Treating You? Time To Give It Some Thought

This commentary originally appeared on EDF's California Dream 2.0 Blog

When was the last time you really gave a lot of thought to your electric bill?

If your answer is “not very often”, then you’re not alone. In fact, the typical household thinks about their electric bill only six minutes a year.

The California Public Utilities Commission (CPUC) now has the opportunity give people another way to control household energy bills by creating a system where changing the time you use electricity can save money. This won’t mean you’ll need to invest more time thinking about energy use, but you’d be well-served to think about the timing of it.

Last week, the CPUC held a public workshop inviting stakeholders — PG&E, SCE and, SDG&E, along with consumer, industry, and environmental groups — to present and discuss their proposals for revising the system of charges for residential electricity use. I had the pleasure of presenting EDF’s proposal for a time-of-use (TOU) pricing system: For customers looking for another option for saving money on their monthly bill, EDF sees TOU as the best pricing policy for both people and the environment; customers uncomfortable with this option would be able to “opt out” and choose another pricing structure.

Currently, the standard “tiered” rate charges customers higher prices for higher electricity usage. The approach is intended to send the message: “The more you use, the more you pay.” Read More »

Posted in California, Demand Response, Smart Grid, Utility Business Models| Read 1 Response
  • Senior Economist
    As Senior Economist, Jamie Fine works to reduce the impacts of energy systems used to power buildings, transport and service people, and produce and move goods.

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