The Citizens Utility Board and Environmental Defense Fund have asked the Illinois Commerce Commission to have the state’s biggest electric utilities, Commonwealth Edison and Ameren, offer optional “time-of-use” electricity pricing plans that empower Illinoisans to lower energy costs and reduce pollution.
Such plans would reward energy-efficient customers and those who shift electricity use away from “peak” hours — when demand is high, prices skyrocket and power plants produce the most pollution.
“In order for the smart grid to work in Illinois, we need to give customers new choices that allow them to use power more efficiently and slash their utility bills,” Citizens Utility Board Executive Director David Kolata said. “The electricity market has become more expensive, so it’s vital that ComEd and Ameren give customers more options. Now is the time for time-of-use pricing.”
With time-of-use pricing, people with digital electric meters can lower their power bills by running certain appliances at times when electricity is cheapest, such as early in the morning or late in the evenings. However, the benefits go far beyond participating households. Cutting energy use at high-demand times, like the afternoon, lowers market electricity prices for everyone, reduces stress on the power grid, and offsets the need for expensive, polluting power plants. Even though market prices plunge to just a few pennies per kilowatt-hour at certain low-demand hours of the day, most Illinois residents cannot take advantage of these low prices because they are locked into rigid, “flat” electricity rates that only change with the season.
“Time-of-use electricity pricing allows for a level of flexibility and efficiency that is nearly impossible with traditional, flat electric rates,” said Dick Munson, EDF Director, Midwest Clean Energy. “Power does not cost the same to produce every hour of the day, so why should it be the same price every hour? Voluntary, time-of-use pricing plans could cut air pollution and electricity bills by allowing Illinoisans to simply run the dishwasher at night when more wind power is available — that’s a win-win for people and the environment.”
This is the third time in six months that CUB, the state’s top utility watchdog, and Environmental Defense Fund, an international environmental organization, have partnered with the ICC, ComEd, and Ameren to make Illinois a national pioneer in building a smarter power grid.
Capitalizing on the Energy Infrastructure Modernization Act, passed in 2011 by the Illinois General Assembly, EDF and CUB are working with state regulators and the utilities to gain greater control over peak energy load, increase electric grid resiliency, and achieve cost savings from energy efficiency. A key to making that happen is giving Illinois residents a full menu of optional electricity pricing plans, such as time-of-use rates. Such plans are made possible with digital meters that quickly and accurately record both the amount and timing of electricity usage.
EDF and CUB have asked the ICC to immediately begin an investigation to explore how ComEd and Ameren could offer time-of-use pricing, with hope that these new rates can be offered by 2016. CUB and EDF have previously joined forces on other ICC filings to improve Illinois’ power grid by giving residents and businesses more access to their own energy usage data and spurring utilities to better measure the smart grid’s contribution to reducing harmful power plant emissions.