edforgNew York NY Boulder CO San Francisco CA Washington DC La Paz Mexico edforgFor more information please contact Beia Spiller EDF economist Ofx00660069ce of Economic Policy and Analysis espiller ID: 895081
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1 CLEAN ENERGYTime-variant electricity pri
CLEAN ENERGYTime-variant electricity pricingcan save money and cut pollutionThroughout most of the country, residential customers same price for electricity regardless of the season day when it is used. Also known as “ at rates,” pricesmask the true system costs of producing and delivering electricity, which vary by time and location edf.org New York, NY Boulder, CO San Francisco, CA Washington, DC La Paz, Mexico edf.org For more information, please contact Beia Spiller, EDF economist, Of�ce of Economic Policy and Analysis, espiller@edf.orgOperations. TVP programs may require operational support such as project management, call center operations, customer noti cations and other ongoing administrative costs.Electricity price design. The type of TVP a utility chooses to offer and how that option is designed will depend on the needs and requirements the utility is aiming to address. Maximizing effectiveness and customer acceptance are further considerations that play into designing prices.Opt-in vs opt-out. Choice structure can also affect TVP adoption rates. Asking residential customers to variant pricing—rather than setting it as a
2 default from —has historically led
default from —has historically led to low adoption. Opt-out TVP programs lead to a much larger reduction in electricity use since many more customers enroll program.Customer education and awareness. Educating customers how they can modify their behavior to bene t from TVP is integral to rolling out a successful program.Flexibility and evaluation. Conducting analyses of existing programs is an essential tool to understand how customers respond to new TVP options and evaluate the need to change or modify the way prices are set. ENERGY DEMAND Time-of-Use Pricing (TOU) Fixed periods based on typical daily demand, critical event has no effect Real-Time Pricing (RTP) Fluctuates hourly based Variable Peak Pricing (VPP)Fixed periods based on typical daily Typical daily demand paid this amount for each kWh MEGAWATTSKILOWATT- Typical day PEAK Critical Peak Pricing (CPP) Elevated pricing during critical times Critical eventLow CostsHigh CostsStandard Costs Environmental Defense Fund257 Park Avenue South New York, NY 10010 Totally chlorine free 100% post-consumer recycled paper Standard Flat Rate Standard Flat Rate Standard Flat Rate Standard Flat Rate Standard Flat Rate