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Real-time Pricing—Putting Customers on the “Spot”

With the era of time-of-use rates and SmartMeters, real-time pricing (spot rate changes passed on to customers based on day-ahead forecasts of energy costs) is not far behind. Installing a solar system in 2008 can lock you in to a known E1 residential rate, instead of the financially unpredictable and volatile world of spot pricing.

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Currently, pricing on the E1 schedule is set based on fixed tier pricing. When demand jumps unexpectantly, the utility companies often take a hit because they must purchase power from other resources and the spot price for this can be high. Today’s customers don’t get increased energy bills until future rate cases. However, with the dawn of real-time pricing, high spot prices would be passed directly on to customers, resulting in much higher bills unless energy usage is dramatically curtailed. For instance, residential customers in Pennsylvania under PPL Electric Utilities are expected to pay approximately 34% more after going to real-time pricing. In order to ease the impending impact, the Pennsylvania Utilities Commission approved a plan where customers can start making additional payments on their 2008-2009 electric bills to offset the 2010 bills!

These measures may put your energy usage in the hands of the utility companies. By driving up the price, they are hoping you will use less energy. Having your own energy source (solar) installed before real-time pricing is enforced will let you maintain control of how you may want to use your energy.

Story Directory

Time-of-Use Rates—Good for Some, Bad for Others

Coming Soon—Energy Efficiency Upgrades Required, Rebate Payments Decreasing

Real-time Pricing—Putting Customers on the “Spot”

SmartMeters—Gateway to Higher Rates

Demand Response—Cutting Power to Save Energy

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