1. Time of Use Rates: A Practical Option – If Done Well
12/27/10
Time of Use Rates: A Practical Option – If Done Well
November 15, 2016
Presented by Jim Lazar
RAP Senior Advisor

2. What Does This Rate Design Say?
12/27/10
What Does This Rate Design Say?
$1.50
$2.25
$2.75

3. Key Points TOU rates are appropriate if:
a) costs vary by time of day, and
b) costs of measurement are small
Technology helpful to empower consumers
Most low-income consumers will benefit
Most low-use consumers will benefit
Peak-Time Rebates are an alternative
Keep the on-peak period as narrow as possible

4. Types of TOU Rates Simple Two-Period Rates Seasonal Two-Period rates
Three-Period Rates
Critical Peak Pricing (CPP)
Real-Time Pricing (RTP)
Alternative: Peak-Time Rebates (PTR)

5. Example Two-Period Rate Jacksonville, FL

6. Example Seasonal Three-Period Rate Southern California Edison

7. Example Critical Peak Rate Oklahoma Gas and Electric

8. Salt River Project “EZ-3” Rate (Summer)
Customer Chooses 3-Hour Window 3 – 8 PM

9. Real-Time Pricing Commonwealth Edison
Customer Charge
Distribution Charge
“Personal Capacity Charge”
Hourly Energy Charge

10. Incorporating TOU with Inclining Blocks Is Not Difficult
TOU Overlay:
On-Peak Surcharge: $.05/kWh
Off-Peak Discount: $.05/kWh

11. Demand Charges
Historically used for Commercial and Industrial customers
NOT used for small commercial or residential due to high diversity.
Non-Coincident Peak (NCP):
$/kW measured at any hour
Coincident Peak (CP):
$/kW measured 3 PM – 7 PM ONLY

12. Demand Charges: A Poor Choice

13. Peak-Time Rebates Targeted at a few key critical peak hours
Events announced
Customer usage during event compared to a baseline usage for that customer.
Credit applied for reduced usage
NO surcharge applied for increased usage

14. Baltimore Gas and Electric PTR

15. TOU and Critical Peak Pricing Works
Approximate Peak Savings from Demand Charge Rate

16. Technology Can Help

17. Technology Can Help

18. Impact of TOU on Low-Income
More Likely:
Apartment
Electric Water Heat
Window AC
Less Likely:
Pool or spa
Central AC
Challenge:
Upgrade appliances
Smart technology

19. Impact of TOU on Low-Income

20. SMUD: Customers Actually Do Things

21. SMUD: Customers Actually Do Things

22. Impact of Different Rate Forms On kWh Usage and Peak Demand

24. 12/27/10
Smart Rate Design
The illustrative rate design we developed in this publication has several distinct elements.
First, customer-specific elements to “connect to the grid. A customer charge for billing and collection, and a capacity charge for the line transformer and service drop.
Second, bi-directional charges for grid services and power supply. These are time differentiated, to ensure that each customer pays for what they use, and has a proper incentive to shape their usage.
Finally, a critical peak element. Our research shows that critical peak pricing can produce as much as a 35% reduction in residential use during critical hours.

25. Expected Results Important: Deploy technology with roll-out.
Beneficial load shift
Value proposition for:
Load management technology
Smart appliances and GIWH
Customer-based storage and EVs
Consumer engagement
Important: Deploy technology with roll-out.
Important: Keep peak period to ~3 hours.

26. Supplemental Slides for Q&A If Needed

27. Functionalized System Costs

28. ~$6/month

29. Different Classes and Circuits Peak at Different Times
Residential Peak:
5 PM Weekends
Commercial Peak:
2 PM Weekends

30. Class Demands May Drive Distribution Capacity Requirements

31. System Peak Drives Power Supply Costs
2 – 5 PM Weekdays

32. System “NET” Peak Moved to 6 PM
Solar Can Change This
System “NET” Peak Moved to 6 PM

33. Peak Load Impacts May Reach A Limit
1,200 MW at 1 PM
2014 Peak:
1,050 MW at 7 PM
2006: 500 MW ramp
6 AM to 1 PM
2014: 250 MW ramp 6 AM to 1 PM
Source: Hawaiian Electric Co