A saving of 13.2% or $86.63 annually could have been saved by electricity consumers if they had participated in a 'real-time pricing' programme, says a new research report released by the Environmental Defense Fund (EDF).
97% of a sample of Commonwealth Edison (ComEd) customers would have saved money if they had participated in a programme in which power prices change hourly. In a broad, first-of-its-kind study, EDF and the Citizens Utility Board (CUB) analysed anonymous energy-usage data from more than 300,000 smart meters installed by ComEd, Illinois’ largest electric utility.
The report is the most comprehensive dynamic-pricing analysis of smart meter data, and the findings suggest that well-designed pricing models, like real-time pricing, could help lower people’s electricity bills and make the electric grid more efficient.
“We are encouraged by these results, but this is just the beginning,” said David Kolata, executive director of CUB, Illinois’ nonprofit utility watchdog group. “We hope these findings ignite discussion on how alternatives to traditional electricity rates have the potential to lower electricity bills for more households.”
“Modern sensors, controls, and meters are producing enormous amounts of data, which can revolutionise electricity markets and play a huge role in lowering pollution from the power grid,” said Dick Munson, Midwest director of clean energy for EDF. “We were surprised to find real-time pricing would have saved nearly all of ComEd’s customers money, even without them doing a thing differently. There’s a big opportunity to design better pricing structures that encourage people to use electricity more efficiently, which lowers energy costs while cleaning the air.”
Illinois is the only state in the country where the two largest utilities—Ameren Illinois and ComEd—offer comprehensive, opt-in, residential real-time pricing programmes. Despite this, the vast majority of ComEd customers still pay a flat or average rate for their electricity supply.
Out of more than 3 million residential customers, only about 17,500 customers are enrolled in ComEd’s 'Hourly Pricing' programme.
Elevate Energy, which manages ComEd’s programme, reports that participants have saved more than 15% off the supply portions of their bill since the option of dynamic pricing was launched in 2007.
The study found:
- All savings would have been achieved without customers changing their behavior, so even greater savings are possible through voluntary adjustments to energy usage.
- The top 5% of savers would have cut their bills by an average of $104 a year, or 31%.
- For the customers who would have lost money (three percent of the sample), the median increase in bills was an estimated total of $6.23 for the year.
- There were no significant differences between customers who have low incomes and other customers.