Time-variant electricity pricing

Time-variant electricity pricing gives customers control of their electricity bills

Throughout most of the country, residential energy customers pay the same price for electricity regardless of the time of day or year it is used.

Also known as "flat rates," these prices mask the true system costs of making, moving, and using electricity, which vary by time and location according to electricity demand. For example, high-traffic energy times occur predictably in the late afternoon when people come home from school and work and turn on air conditioners, TVs, and other appliances.

Time-variant pricing [PDF] better reflects the true cost of electricity, allowing people to choose when they use power based on electricity prices at that time. EDF sees huge potential in giving people this type of control which is why we advocate for its development and implementation in key states across the country.

The potential

  • $150The amount most New Jersey customers saved in 16 months in a time-variant pricing pilot.1

When customers don't know the true price of electricity or how much they will pay at the end of the month, they do not have the basic information needed to conserve energy (and, thus, lower their bills) when it matters most.

In addition to lowering electricity bills, this clean energy solution has the potential to reduce air pollution, improve grid resiliency, and optimize our use of renewable energy.

EDF works with utilities, regulators, and other important stakeholders to bring this solution to the table in states like New York, California, and Illinois. Using information from pilot programs, we see that this modern way of pricing energy can help customers, the grid, and the environment.

Related blog posts

See more electricity pricing posts »

Sources
  1. "Communicating Thermostats for Residential Time-of-Use Rates: They Do Make a Difference," Mary Klos and Jeff Erickson, Summit Blue Consulting and Elaine Bryant and Susan Lacey Ringhof, Public Service Electric and Gas Company.