Solar energy is booming – and you needn’t look further for proof of its success than Brian H. Potts’ recent op-ed in the Wall Street Journal. When a utility lawyer like Potts is arguing for what type of solar energy our country should be investing in –utility-owned, large-scale solar versus customer-owned, rooftop – you know this renewable energy resource has gone mainstream. And that’s a good thing.
We should support a wide variety of clean energy resources precisely because these technologies eliminate the costs of pollution now being socialized by fossil fuel generators. And this is becoming all the more critical as the costs of a changing climate grow. Read More
With time-variant pricing, people can choose to run their dishwashers at times of day when electricity is less expensive.
New York cemented its reputation as a national leader in energy policy last year when it announced plans to revamp the way utilities are regulated in order to establish a 21st-century energy system. But the state is still trailing in one crucial area: More than 99% of its homes have antiquated meters that tell utilities nothing more than how much electricity customers use each month. To achieve its ambitious goal of an energy revolution, the state should embrace a technology—advanced meters—that empowers New Yorkers to cut their energy use during times of the day when it matters most.
A key component of the smart grid, advanced meters provide detailed electricity-use data throughout the day. This information reduces inefficiencies in the energy system and leads to quicker detection of power outages. Such improvements reduce the costs of operating the power grid, resulting in lower electricity prices.
Advanced meters, also known as two-way-communicating Advanced Metering Infrastructure (AMI), or "smart meters" (which can both send and receive information such as electricity prices and energy usage), enable pricing that incentivizes customers to use electricity when it is cheaper and cut back when it is expensive. This time-variant pricing reduces congestion on the power grid, ultimately lowering costs for everybody. But, without advanced meters measuring electricity use in short time intervals, it's impossible for utilities to bill on a time-variant basis. Read More
Also posted in Clean Energy
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.
The new Apple Watch, which went on sale last Friday, is attracting huge attention. Among many other features, the watch will monitor your health by tracking fitness and activity, like the Fitbit. In its first day on the market, nearly one million were sold.
The popularity of this wearable device speaks to a larger trend happening in technology that one might call “life tracking”: the ability to track, analyze, and hone your personal activities through the use of connected devices. From fitness to finance, technology like the Apple Watch is enabling more choice and efficiency than ever before. And, just as fitness wearables monitor our personal activity, other devices can monitor our home energy activity – leading to an array of cost-saving and environmental benefits.
Home energy monitors
The Nest thermostat is one of the most well-known home energy monitors. It learns how you like to set your home temperature, and then automatically programs itself to follow your patterns.
For example, if you work an office job and are away from home nine to ten hours a day, the Nest thermostat may cycle the air conditioner down to increase the home temperature a couple of degrees during the day while you’re gone, and then automatically reduce the temperature an hour or so before you return to re-establish your preferred home temperature. Read More
Last week, Environmental Defense Fund (EDF) co-hosted a successful forum on residential time-variant electricity pricing – which allows customers to pay different prices for electricity depending on when it is used – within the context of New York’s ‘Reforming the Energy Vision’ (REV) proceeding.’
Co-hosted with the New York Department of Public Service and New York University’s Institute for Policy Integrity, the full-day forum, “On the REV Agenda: The Role of Time-Variant Pricing,” brought together more than 150 regulators, utility executives, academics, and other stakeholders to explore how residential time-variant pricing works, what it can accomplish, and how best to implement it. Below is a recap of some of the high-level takeaways from the forum.
How time-variant pricing (TVP) works
One of EDF’s objectives has been to improve the efficiency of the electricity industry by pursuing a market-based approach to electricity pricing. In most well-functioning markets, the cost of making a product and its relative scarcity is reflected in the price. For example, a door is more expensive than the wood with which it is made in order to reflect the labor costs involved. Similarly, strawberries are more expensive during the winter because they are less abundant during that time. Customers understand that prices vary with production costs and over time, yet neither of these elements gets reflected in how residential customers currently pay for electricity.
These are exciting times. New York’s ‘Reforming the Energy Vision’ (REV) has paved the way for change of unprecedented proportions. New York regulators are preparing the state for a future in which rooftop solar installations are ubiquitous and the rumbling staccato of gasoline-fueled automobiles is replaced by the relative silence of electric vehicles.
While more rooftop solar energy and electric vehicles are certainly part of our energy future, some of the biggest changes are likely to come from less visible – and less obvious – sources, particularly for customers in densely populated metropolitan areas and low-income customers, who make up a significant portion of New York state’s customer base.
Urban dwellers, for whom mass transit is a central part of daily life and owning your own rooftop is less common, may view electric cars, rooftop solar, wind, battery storage, and on-site energy generation as appealing, but also abstractions more suitable for upstate homeowners than those living in crowded apartment buildings.
For these customers, the opportunity to contribute to a clean energy future will be guided largely by the domain of Adam Smith’s invisible hand: economic forces that enable greater control over how much energy is used and at what price. Read More