Pilot projects are demonstrating the potential of smart metering and smart rates to make the most of supply and demand resources. But as empirical studies show, not all pricing designs are equally...
Engaging customers will require more than TOU pricing.
order, the load-duration curve must be flattened. Current demand is going in the opposite direction, since the peaks are rising relative to average load.
Company engineers prefer “direct load control” since they know what they have. In some cases, the customer doesn’t even perceive the momentary interruptions of the air conditioner and other appliances. The energy manager is better for two reasons. First, more customers will participate if they have control rather than ceding it to “big brother.” Second, the customers, not the utility, customize their responses. These two benefits make for happier customers and greater participation. The worry about loss of utility control is overblown. If the utility can query the energy managers, they know how the devices will react. Some customers may choose to override their energy manager, knowing there will be a penalty, but the individual power curtailment will be small because nearly all customers will participate.
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2. Borenstein, Severin. “ The Long-Run Efficiency of Real-Time Electricity Pricing ,” The Energy Journal . 2005; 26; 3. pp 93 .
3. Wolak, Frank A. “ Residential Customer Response to Real-Time Pricing: The Anaheim Critical-Peak Pricing Experiment ,” May 24, 2006 .
4. Energy Action Plan 2008 Update . February 2008. California Public Utility Commission and California Energy Commission .
5. Hammerstrom, D.J., et al, Pacific Northwest GridWise Testbed Demonstration Projects; Part II , Grid Friendly Appliance Project. October 2007, Pacific Northwest National Laboratory, PNNL-17079.