Myth 1. RTP increases the utility's costs and revenue requirements. %n1%n
Reality 1. A well-conceived RTP program reduces the utility's costs and revenue requirements.
RTP programs can reduce peak demands for power, increase off-peak demands, and reduce the need for additional peak-load capacity. This increase in efficiency can lead both to higher company profits and greater customer savings. As the electric industry becomes more competitive, these savings will flow to those customers most responsible for lowering the utility's costs. According to projections from Entergy Corp., which ran a pilot RTP program called PowerView %n2%n for residential customers in Little Rock, Ark., for one year, each new RTP customer helps avoid installing an additional 1.5 kilowatts of capacity, saving $1,200 in capital costs. After accounting for the $850 telecommunications system in the PowerView project, the utility's net investment savings was estimated at $350 per customer. %n3%n
Myth 2. RTP is the same thing as peak-load pricing.
Reality 2. RTP involves much more than traditional peak-load pricing.
RTP is peak load pricing carried to the limit of six-minute, 15-minute or hour-long blocks, as opposed to eight-hour or longer blocks as in traditional peak-load pricing systems. Hence, instead of charging a flat 13 cents per kilowatt-hour, utilities can charge real-time prices that vary with marginal costs (em e.g,. from 4 cents to $2.50 in New York City. RTP approximates marginal and/or incremental costs much more closely than conventional peak-load pricing schedules.
Myth 3. RTP is only for industrial customers.