Dynamic pricing

Recent calls for Maryland to revert from a competitive electricity market to a monopoly system may be good-intentioned, but they are quite misguided. Innovation has replaced the inefficiencies of the old monopoly system, giving customers new choices, competitive prices and an efficient, reliable power supply.
 

A new study shows that electricity pricing policies may become a major obstacle to electric vehicle (EV) affordability, but time-of-use pricing – a hallmark of competitive markets – could be the solution.
 

The age of the smart grid is dawning, with millions of smart meters already installed across the country. But some utilities have encountered opposition to smart-meter pilot programs, and the question of how to communicate benefits to consumers complicates the picture.
 

Dozens of alternative energy suppliers have been attracted to Texas’ competitive electricity market, and the competition between suppliers is creating significant economic benefits for consumers. As market participants compete against each other to provide the best possible service at the lowest cost in order to attract and retain customers, market forces are driving consumer costs down while increasing choice and service offerings, and stimulating innovative technologies.
 

Competitive electricity markets will stimulate plug-in hybrid-electric vehicle (PHEV) technology, facilitate integration of PHEVs with the power grid, and unlock consumer benefits. This message emerged during a conference sponsored by COMPETE and the University of Illinois-Springfield that explored the future of plug-in hybrid electric vehicles and the smart grid.

Smart meter technology, considered a lynchpin to widespread smart grid success, has taken a major step forward with the conclusion of a Washington, D.C. pilot program. PowerCentsDC, a two-year program, tested how consumers reacted to a variety of time-of-use price signal and rate programs.
 

Smart meters combined with enhanced information from utilities could significantly reduce electricity consumption and costs, according to a new report from the American Council for an Energy-Efficient Economy (ACEEE).
 

Smart grid technology is creating economic and environmental benefits, but must reach all consumers and enable intuitive energy use decisions to truly achieve its potential. This message was the focus of a recent panel discussion on consumer perspectives during a smart grid policy conference at the Brookings Institution.
 

Dynamic pricing is a term used to describe a key feature of competitive electricity markets. Put simply, electricity costs vary so power is cheaper when demand is low and more expensive when demand is high.
 
Now, a new report finds dynamic pricing significantly benefits low-income customers by empowering them to take control of, and reduce, their electricity bills. The report from the Institute for Electric Efficiency (IEE) challenges the prevailing view that low-income customers would be harmed by dynamic pricing and makes a strong argument for widespread adoption of one of the biggest economic benefits of competitive markets.
 

Innovative smart grid and energy technology solutions can help achieve economic and environmental goals if customers have access to dynamic pricing. That message, and the role competitive markets play in these innovations, was front and center in remarks from national policy leaders at the recent National Town Meeting on Demand Response and Smart Grid. 
 
“Creating a smart grid is an essential part of the energy revolution,” said Congressman Ed Markey (D – MA) in a keynote address, before predicting that smart meter deployment will rise ten-fold over the next decade. “A global revolution in clean energy is needed, and competition between all for leadership in new energy will create jobs.”
 
Innovative new smart grid technologies are already springing up across the country, spurred on by competition. “Because we have organized markets, we are ahead in our ability to bring technology and demand response to consumers,” said Jon Wellinghoff, Chairman of the Federal Energy Regulatory Commission, during a roundtable on the future of smart grid policy. Wellinghoff cited PJM Interconnection’s 9,000 megawatts of dispatachable demand and Plug-in Hybrid Electric Vehicle pilot program, as well as Constellation NE’s VirtuWatt technology.