Pay me to use power? Really?

[Patrick W]

I met someone who works for the local electric power company at a dinner last eveing. When I mentioned owning an electric car she mentioned her company’s two tiered system.

I knew they had such a system but another person I spoke with on the phone right after buying the car in April talked me out of it.

The lady last eveing acknowledged there are better systems in other states but suggested I at least consider it and then pointed me to this file (with an incredibly long URL):
https://www.rockymountainpower.net/content/dam/rocky_mountain_power/doc/About_Us/Rates_and_Regulation/Utah/Approved_Tariffs/Rate_Schedules/Residential_Service_Optional_Time_of_Day_Rider_Experimental.pdf

Or if that does not work try:
http://tinyurl.com/q7we8wq

The downside I noticed right away is that the two tier system is only available May through Saptember.

But then she pointed to the rates they charge during that period. Power consumed during peak hours of 1300 to 2000 is 4.3560¢ per kWh.

That’s pretty cheap but then she pointed to the off peak rate of (1.6334)¢ per kWh. When I asked about the parenthesis she said it’s a credit. What?! Not only cheap but they are in effect paying me to use power off peak.

That just seems crazy.

Of course the offices are closed until Tuesday so I can’t confirm so I thought I’d post here to see if that could possibly be true, here or anywhere else.

True?

 

[Chuq]

In an electricity network, generation is scaled up and down based on real-time demand. Depending on the method of generation, some power sources are unable to be "spun down" fully overnight. As an example: hydro is very flexible, it can be switched on and off at a moments notice, whereas a coal power plant can only ramp up and down gradually. It is very likely that a predominantly hydro area has only a tiny amount of generation at 4am; whereas the coal plant, while it is ramped down, can often not get as close to zero as the demand does and is actually generating power that is unused. If they have way more generation than demand, it can cause voltage fluctuations on the network, therefore they have to ensure the demand matches the supply. In some areas, electricity distributors with interconnects to other regions do just what you suggest, pay the other region to take their excess power. I'm guessing this is a similar thing on a smaller scale.

(I think this is right, but would appreciate any corrections!)

 

[Patrick W]

In an electricity network, generation is scaled up and down based on real-time demand. Depending on the method of generation, some power sources are unable to be "spun down" fully overnight. As an example: hydro is very flexible, it can be switched on and off at a moments notice, whereas a coal power plant can only ramp up and down gradually. It is very likely that a predominantly hydro area has only a tiny amount of generation at 4am; whereas the coal plant, while it is ramped down, can often not get as close to zero as the demand does and is actually generating power that is unused. If they have way more generation than demand, it can cause voltage fluctuations on the network, therefore they have to ensure the demand matches the supply. In some areas, electricity distributors with interconnects to other regions do just what you suggest, pay the other region to take their excess power. I'm guessing this is a similar thing on a smaller scale.

(I think this is right, but would appreciate any corrections!)

Most of the power here (Utah) is coal generated so maybe they really are willing to pay me to charge my car. And I thought using superchargers was cheap. Of course the program ends this month so even if the offer is real I won't be able to use it until the program resumes next year.

There appears to be a few other details about the program I need to have explained. I'll work on that when the office reopens Tuesday and report back here then.

 

[Johan]

Very interesting Patrick!

I had to reference your post in the Solarcity investment thread: SolarCity (SCTY) - Page 229

 

[David_Cary]

I've heard there is a similar rate structure around Chicago. Makes sense only in the non-heating season.

Heating hot water on a timer would seem like a really good idea. Problem is peak power is so cheap anyway, it doesn't really matter.

I think part of the issue in cheap areas, to make a decent motivation they have to have a decent price spread. And the only thing a lot cheaper than cheap is negative....

My rate structure is 7 cents peak and 5.6 cents off peak. The only real difference is that I have a demand charge that only plays out in the Peak time. But if it wasn't for that, my incentive to use off peak is really small.

 

[Chuq]

No doubt that when the Powerwall starts rolling out, plans like this will become a thing of the past....

 

[hipringles]

I am 95% certain your company does not know how their own billing works. I experienced the same thing through fpl. It took literally 20 people @ FPL until I talked to someone who knew what was going on

https://www.fpl.com/rates/pdf/Sept2015-Residential.pdf


You see for time of use that the sum of charges is negative? I was confused as well.
The way it works for us is they take the NORMAL charge, then apply the time of use modifications.

So for on peak its roughly 18C per kwh, (normal is right about 11), and off peak its 4-5c per kwh (normal is about 11, minus the 4.5c adjustment)

 

[gnxs]

In an electricity network, generation is scaled up and down based on real-time demand. Depending on the method of generation, some power sources are unable to be "spun down" fully overnight. As an example: hydro is very flexible, it can be switched on and off at a moments notice, whereas a coal power plant can only ramp up and down gradually. It is very likely that a predominantly hydro area has only a tiny amount of generation at 4am; whereas the coal plant, while it is ramped down, can often not get as close to zero as the demand does and is actually generating power that is unused. If they have way more generation than demand, it can cause voltage fluctuations on the network, therefore they have to ensure the demand matches the supply. In some areas, electricity distributors with interconnects to other regions do just what you suggest, pay the other region to take their excess power. I'm guessing this is a similar thing on a smaller scale.

(I think this is right, but would appreciate any corrections!)

That's roughly the way I understand it also.

Here in IL, I believe about 49% of electricity is Nuclear generated and we also have a decent amount of wind generation. Obviously the nuclear is hard to vary quickly as a response to demand and my understanding is that there is no incentive for the wind to be turned off at night. As a result, my off peak kWh prices are typically in the $0.02 range and like Utah, we occasionally see negative rates overnight.

My utility, ComEd, does not do what hipringles noted in FL. They are actually paying me for those periods when it is negative. However, that is only for the "Electricity Supply Charge". There are other charges on my bill that are based on kWh usage that also factor into the true cost per kWh. Things like "Transmission Service Charges", "Distribution Facilities Charge", "IL Electricity Distribution Charge", etc. and those are always an addition to the bill based on a set % of usage.

Here's a blurb from ComEd on their RRTP website in reference to negative prices: