T&D World Minute with Rick Bush: Time-Based Rates

Today I will be sharing a few insights on the time varying rates we have seen make it to the marketplace. There are essentially four time varying rates. The first is time-of-use pricing, which is simple to understand and execute and makes up 85% of the TVR offerings.

The second most common is critical peak pricing and it makes up to 8% of TVR  rates. Under CPP reduced fixed rated are applied but higher rates are then charged during pre-announced peak demand events

The third most common rate is the Peak Time Rebate, which makes up 5% of TVR rates where customers are compensated for reducing peak consumption.

The last of the four rates is real time pricing, which makes up 3% of the use. RTP is determined by the marketplace and is now available on Oklahoma, Illinois and Ohio. We will see the use of TVR increase as they can: lower energy bills, lower stress to the power grid and reduce the need to install more peaking plants.

This has been a T&D Minute.