Electricity Today T&D Magazine

Most utility customers now pay an average price for electricity that changes little (if at all) over the course of the year. Average, flat-rate, real-time pricing is akin to a form of insurance, where a premium is paid to hedge against market volatility and price spikes. Yet this approach misses the system-wide benefits of dynamic electricity pricing, in which customers pay for power through time variant rates.

Until recently, quantifying the cost of this trade-off for individual consumers has been challenging due to the limited amount of energy-use data available. As a result, it has been difficult to make analytical progress, and the debate over dynamic pricing often relies on theories rather than empirical evidence.

Now, first-of-its-kind research from the Citizens Utility Board (CUB) and Environmental Defense Fund (EDF) suggests real-time pricing could easily help people save money on their electricity bills in Illinois, but further analysis is needed to...