Pilot program will charge more for electricity during peak demand

November 9, 2009 · Posted by Laura Snider in Energy 
Xcel Energy's Valmont power station east of Boulder | DailyCamera.com

Xcel Energy's Valmont power station east of Boulder | DailyCamera.com

Xcel Energy wants to launch a pilot program in Boulder that would charge people more to turn on their lights or dry their clothes during the hours when demand for electricity is greatest.

The idea would be to get people to burn less watts between 2 p.m. and 8 p.m., and perhaps, overall. Boulder was chosen for the pilot because of its smart grid infrastructure, which would allow folks to program those dishwashers and cellphone chargers to come on in the middle of the night instead of right after work.

From the Daily Camera:

If the Colorado Public Utilities Commission approves the request, the pilot program would enlist about 2,000 customers and run from June 2010 through December 2011.

The idea is to encourage people to burn less wattage from 2 to 8 p.m. when demand peaks, which in turn would reduce the need for “peaking” power stations — such as the natural gas-powered unit at Xcel’s Valmont power plant east of Boulder — that are revved up to cover the spike, especially in the summertime when air conditioners are humming.

Renewable energy advocates also say that shifting electricity use — like turning on a clothes drier or plugging in an electric car — to late-night or early-morning hours can help make more efficient use of energy from the wind. Unlike fossil fuels, which can be burned when they’re needed, winds continue to blow overnight even when the demand is low. Plugging in overnight would take advantage of wind energy that might otherwise be lost.

Read the full story at DailyCamera.com, or learn about the three pricing choices that will be offered during the pilot:

Time of use: Under this plan, customers are always charged more for electricity used at peak times, between 2 and 8 p.m., and less for using electricity at other times. Peak rates would be higher in the summer — when air conditioners put a greater load on the grid — and lower in the winter.

Critical peak pricing: Customers who choose this would have a similar payment scheme as “time of use” customers, but their peak-demand prices would be slightly lower in both seasons. This plan also adds an additional price for “critical peak” days, those 15 or so days during the year when demand is highest on the grid. Customers who sign up for this pricing plan agree to pay a much higher rate during critical peak times, but they will also be informed of critical days beforehand, by e-mail or phone, so that they can adjust their electricity use.

Peak time rebate: This final option would allow the customer to be billed as they are now most of the time. During critical peak days, however, these customers would be rewarded with a credit on their bill if they reduce their electricity use below normal.

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