You've heard talk lately about the convergence of electricity and natural gas. That idea has grown as commodity markets have matured for gas and emerged for bulk power.
But some...
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Real-time Pricing Proposed in Penn.
About 1,360 customers of Metropolitan Edison Co. (Met-Ed) and Pennsylvania Electric Co. (Penelec) may be buying power this month under a real-time pricing (RTP) plan (em if the Pennsylvania Public Utility Commission (PUC) approves the utilities' proposal. Industrial and commercial customers with demand over 400 kilowatts (Kw) would agree to a historical load, or customer baseline load, for a year. Beyond that load, energy would be bought at hourly market rates. (Under traditional ratemaking, hourly prices are averaged and then incorporated into a fixed rate.)
Customers would enjoy lower costs to the degree they can shift their load to hours when energy is its cheapest, avoiding peak periods. RTP customers will receive 24 hourly prices by 4 p.m. the day before prices become effective. Customers that could benefit the most from RTP have flexible, growing operations and can increase electrical use when energy costs are low. The range of eligible customers spans bakeries to department stores to manufacturing plants.
"It's not so much the size of the customer, it's their ability to shift, at short notice, their usage," says Judith D. Botvin, Met-Ed/ Penelec spokeswoman. "In other areas where companies have offered something like this, the utility assumes the risk and in this, our company does not assume the risk . . . . [T]he customer has to use up to their baseline amount [of power] at the regular rate. And then the incremental use goes at the market rate."
There also are no customer guarantees. "It's strictly a matter of their commitment to it and their analysis of the information we can provide to them to figure out how to make it work," Botvin says.
According to Lin Seyler, a Met-Ed/Penelec staff analyst, customers with computers and modems would dial up a utility "bulletin board," then react to the data by adjusting machinery or equipment.
The utilities asked the PUC to let it begin offering the RTP plan to customers on March 2. "We have every indication that it's favorably viewed," Seyler says. (em JS
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