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Variable Rate Electricity Pricing:

A pilot program in Chicago could help make variable rate pricing for electricity a reality for consumers. The idea is straightforward: Because the demand for electricity varies from day-to-day, as well as by time of day, electricity prices should reflect this fact. This would encourage consumers to shift some electricity use, such as running the dishwasher, from peak daytime hours into the evening. Some industrial users already purchase electricity this way, but the benefits of implementing such reforms could be signficiant -- and would move retail electricity service in the direction of an actual market in which prices provide information about supply and demand.

The NYT reports:

Most people are not aware that electricity prices fluctuate widely throughout the day, let alone exactly how much they pay at the moment they flip a switch. . . .

Just as cellphone customers delay personal calls until they become free at night and on weekends, and just as millions of people fly at less popular times because air fares are lower, people who know the price of electricity at any given moment can cut back when prices are high and use more when prices are low. Participants in the Community Energy Cooperative program, for example, can check a Web site that tells them, hour by hour, how much their electricity costs; they get e-mail alerts when the price is set to rise above 20 cents a kilowatt-hour.

If just a fraction of all Americans had this information and could adjust their power use accordingly, the savings would be huge. Consumers would save nearly $23 billion a year if they shifted just 7 percent of their usage during peak periods to less costly times, research at Carnegie Mellon University indicates. That is the equivalent of the entire nation getting a free month of power every year.

Meters that can read prices every hour or less are widely used in factories, but are found in only a tiny number of homes, where most meters are read monthly.

The handful of people who do use hourly meters not only cut their own bills, but also help everyone else by reducing the need for expensive generating stations that run just a few days, or hours, each year. Over the long run, such savings could mean less pollution, because the dirtiest plants could be used less or not at all.

Related Posts (on one page):

  1. Kiesling on Electricity Metering, Pricing and Competition:
  2. Variable Rate Electricity Pricing:
AK (mail):

Participants in the Community Energy Cooperative program, for example, can check a Web site that tells them, hour by hour, how much their electricity costs; they get e-mail alerts when the price is set to rise above 20 cents a kilowatt-hour.

I'm guessing a lot of people can't be bothered to check a website or their email every hour to find out how much electricity costs. Only about 75% of households in the US have internet access, and I'm guessing that the 25% who don't are the ones that need to cut electricity costs the most. What would make the most sense is a gadget that would go near the thermostat or some other conspicuous place and display the current price of electricity.
1.8.2007 8:58am
Shawn-non-anonymous:
It is probably enough for consumers to know the trends in advance and the actual cost on the monthly bill. If the goal is to reward off-peak use, just knowing that power is cheaper at midnight is sufficient.

Letting price fluxuate too quickly will have an adverse effect, though. People will be unable to plan ahead and might just give up out of frustration. For example, if a load of clothes takes 90 minutes to wash and dry and prices fluxuate often over that 90 minutes, it'll be hard to figure out what your cost will be. What if the load starts cheap but finishes expensive?

If my electric company (which also owns the local gas company) used cell pricing as a means to describe this new plan, I'd run away in fear. I can wash clothes after 7pm on weekdays except on holidays or days where the heat index exceeds 80% of seasonal average... YIKES!
1.8.2007 9:13am
XON:
The extremely insidious downside of this to all of us is that it is, in reality, a barrier-to-entry into the an efficient electricity market to 99.9% of the consumers. On the one hand, you'll have the utilities spending several hundred thousand, if not millions of dollars on computers and programs to identify the price fluctuations, likely down to a measure of accuracy of minutes, if not seconds. On the other hand, only the truly geekiest of us will have the ability, not to mention the computing and technical resources, to gather sufficient supply-demand information to make truly efficient decisions as to when to enter the market, or act within it.

If this comes into practice, even the most concerned of us customers will probably get about to the level of "electricity is cheaper after midnight."

This entry barrier problem also feeds directly into a, perhaps larger, secondary problem: Given that information will be unequally posessed (as distinguished from available), abuse of the system is essentially inevitable, given the corporate imperative to maximize profit. In other words, with no opposite entity with equal information AND power, there is effectively no check on the utilities pricing; they can charge whatever they want, and blame 'very short term demand fluctuations' that, again, all but the geekiest of us wouldn't be able to identify.

Alas, a microcosm of the broader 'capitalism' that is overtaking america.
1.8.2007 9:27am
Houston Lawyer:
My father worked at a rural electric COOP. Several years ago, he told me of a program where, in return for some type of discount, regular customers could sign up for a program whereby either their air conditioning or water heaters would be monitored during peak usage hours. Upon a signal received, these appliances would delay starting up for a few minutes during peak usage times. This cut the COOP's peak usage rate and allowed it to reduce rates.

In places in Europe, you can only heat your water at night.

It makes far more sense to adopt the COOP's approach than to build billion dollar plants to cover peak usage.
1.8.2007 9:58am
Alex R:
I'm skeptical that enough residential energy consumption can be time-shifted to make any difference. This webpage lists the top residential electricity consumers. It's dominated by heating, air conditioning, refrigeration, and lighting -- all things that you can't easily shift to another time of day. (Of course, you can choose to use *less* energy during the day, for example by using heating and air conditioning more sparingly, but the main advantage of variable rates comes if you can shift energy use from the day to the night.)

On the other hand, it may be that it only takes small reductions in the power consumption during peak usage periods to greatly reduce costs. Then shifting dryer usage and timing water heaters to only run at night might be more valuable. Of course, if your home has natural gas service, better to run a gas dryer and gas water heater, as natural gas doesn't have the peak/off-peak cost differences.
1.8.2007 10:16am
Ted Frank (www):
In my pre-law life, I worked for a power company programming variable rate-pricing spreadsheets, and wrote my senior economics thesis on the subject. It's possible to cheaply devise tiers of pricing a day in advance; they won't be precise, but they'll provide much more accurate price signals than the flat-rate pricing I see on my bill today.

There are plenty of ways to reduce electricity usage beyond just time-shifting. On a particularly hot day, one can set the air-conditioner for 74 degrees instead of 72. (A digital thermostat that doesn't turn the air-conditioner on at all until a few hours before you get home is also a good investment.)

It really does take only small reductions in power consumption during peak usage periods to greatly reduce costs. There are baseline plants that run almost continuously that provide cheap power, and then there are "peak" plants that run only when the system is straining that provide very expensive power at the margin; and if the peakload grows, the power company has to invest to build more of these inefficiently used plants.
1.8.2007 10:24am
Harry:
The local utility company has had that here for several years. Some of the largest users have been forced to convert. Most voluntary users opted out after a while due to increased costs, they couldn't shift enough usage off-shift to make up for the prime usage increases meant to encourage shifting. It sounds great, until you look at what can't be shifted.
1.8.2007 10:30am
lee (mail):
Just wondering--could you name a few generating stations that run just a few hours each year?
1.8.2007 10:36am
KevinM:
But it's otherwise not a market system. When consumers "save nearly $23 billion a year," the power companies lose profits. Probably not $23 billion, but plenty. Then they go to their public utilities board, from whom they request and get a rate increase. So the plan would, it seems to me, mostly have the effect of evening out demand over the 24-hour day, which is a way of getting more electricity from the same generating capacity. That's good, but I'm doubtful that the consumer will save any money.
1.8.2007 11:01am
Byomtov (mail):
This idea has been around a long time. Why it has not been more widely used I don't know. As others have pointed out, a minute by minute fluctuation in rates is sort of silly. Better to establish known peak hours and let users plan accordingly. And they can do this, by using modern thermostats, etc.

As Ted Frank mentions, there are potential real savings to utilities. As I understand it, when the load is low the generating facilities that run on the cheapest fuel areused. As it grows those using more expensive fuel are brought on line. So the marginal cost increases. And this does not even allow for a reduced need to build more peak-load plants.
1.8.2007 11:34am
David Chesler (mail) (www):
My electric company sends notices with the bill asking us to delay washing dishes or clothes until after some time in the evening (I think it's 8pm). If I had even a penny's incentive, I would. (I've already got compact flourescents in almost every socket, and I have one 5kbtu air conditioner I used one night last summer and none the summer before. My biggest use is the dehumidifier in the basement [adds $40 to a $100 monthly bill] -- I could certainly shift that to cheaper times.)

(A digital thermostat that doesn't turn the air-conditioner on at all until a few hours before you get home is also a good investment.)

Some of my window fans have thermostats that turn on the fan only when the room temperature is above a certain point. As I blogged, it ought to have two thermostats: if outside is hotter than inside, drawing in outside air isn't go to cool the house. (I suppose one could put it on a timer, don't blow unless it is hot and it is after 4pm...)
1.8.2007 11:36am
Shelby (mail):
Not only has the idea been around for a long time, it's been put into practice before. When I moved to Northern California in 1991, my future father-in-law told me that his house in the Santa Cruz mountains (technically in Los Gatos) had a meter that determined when electricity was used during the day. His utility had offered customers a plan in which off-peak use was much cheaper than peak; something like noon to 7 pm was peak. He shifted clothes-washing, etc. to morning and evening. The plan was no longer available at that time (1991), but existing participants with meters installed were able to stay on it.
1.8.2007 12:00pm
MnZ (mail):
Actually, minute by minute price would be very useful if the information was sent directly into high usage appliances. If a small percentage of air conditioners, dryers, refrigerators, and stoves delayed switching to full bore for a few minutes, most brownouts could be averted.
1.8.2007 12:01pm
MnZ (mail):
Actually, minute by minute price would be very useful if the information was sent directly into high usage appliances. If a small percentage of air conditioners, dryers, refrigerators, and stoves delayed switching to full bore for a few minutes, most brownouts could be averted.
1.8.2007 12:01pm
Barry P. (mail):
I think XON is deranged. Anybody can go to system operator websites and see the real-time prices being charged to load-serving entities (i.e., local utilities.) For example, go to www.pjm.com and click on the quick link entitled "real-time LMP". Dig a little deeper, and you can get the price at every 5-minute interval at every node in the network for the past 7 years. It's really not rocket science - you don't need a Cray and a Ph.D. to observe real-time data that update once every 5 minutes.
1.8.2007 12:34pm
Barry P. (mail):
Oops - that should be the "Operational data" link. Historical stuff is under "real time LMP."
1.8.2007 12:37pm
Kazinski:
About 5 years ago PSE in Washington introduced a tiered pricing structure with 3 different rates depending on the 5 or 6 time slots during the day. They had invested an enormous amount of money putting in automatic meters so they could get a read every 5 minutes from virtually every meter in the service territory. But the plan failed due to regulatory sabatoge. The Washington State Utilities Commission put such onerous regulations on the scheme that consumers couldn't see enough savings to make it worthwile, and the Utility wasn't getting the demand shifting they were hoping for. The commission insisted that the plan be revenue neutral or positive to each individual cconsumer. So no matter what their use pattern, it couldn't cost even one consumer more than the standard rates, even though there was an opt-out provision.

Shifting power to off peak timeslots has an especially large environmental benefit in the Northwest because most of the power comes from hydro-electic sources, but a lot of the peak power comes from coal burning power plants. However the Utilities commission was smart enough to see that a privately owned company would never propose any change in the rate scheme without some nefarious ulterior motive, so the top priority needed to be to fight the greedy corporation, not help the environment.
1.8.2007 12:42pm
blcjr (mail):
As others have noted, this is all old news. Sure, maybe there have been new developments in metering technology, but the idea of marginal cost pricing for utility service has been around for a long time. I was pretty put off right away with the excerpt from the article when it started off "Most people are not aware that electricity prices fluctuate widely throughout the day, let alone exactly how much they pay at the moment they flip a switch. . . ." What varies are costs, not prices. Nor do they vary as much as the article indicates. Since plant costs are fixed, and are not part of any valid marginal cost pricing scheme, what we are really talking about here are variations in fuel costs, as in the difference between burning gas to fire a combustion turbine to meet peak demand, versus the cost of coal for a base load unit. While the average cost of fuel burned will vary as the mix of fuel sources change, the marginal cost over the course of a day doesn't vary anything like the article implies, and having metering technology that informs consumers of how average fuel costs vary isn't quite the same thing as marginal cost pricing.
1.8.2007 12:48pm
Jon A (mail):
Utilities plan and construct the Electric System for the Peak Hour Usage. The only way to reduce the total cost of investment in the transmission system is to reduce the peak hour load. The peak hour load is usually experienced on the hottest day of the year. The utility is penalized if it is required to implement rolling blackouts to survive the peak hour(think California).
Time of Day pricing would allow some consumers to reallocate their electricity usage to off peak hours and harvest the savings. But the big money is in reducing the need to maintain power plants in a standby condition for 9 months of the year just so the energy is available for 90 days in summer. There are many power plants that are built just to satisfy this need and payments to them form a large part of the deregulated electric market.
1.8.2007 12:56pm
tefta2 (mail):
FPL here in Florida offers a similar option for the A/C. It turns off at peak usage time, but when we came home from a hospital stay to a very hot house, we opted out it.

We routinely use kitchen and laundry appliances early in the early am or in the evening, so aside from cooking, we're more or less doing the same thing now and so can everybody else without creating another bureaucracy to eat up whatever savings there might be.
1.8.2007 1:06pm
John T (mail):
When consumers "save nearly $23 billion a year," the power companies lose profits. Probably not $23 billion, but plenty. Then they go to their public utilities board, from whom they request and get a rate increase. So the plan would, it seems to me, mostly have the effect of evening out demand over the 24-hour day, which is a way of getting more electricity from the same generating capacity. That's good, but I'm doubtful that the consumer will save any money.

Well, the demand is smoothed out, then the utility doesn't have to build or upgrade as many plants. Especially in the case of areas where the peak plants are all coal, but many of the base plants are hydroelectric or some such. (You can't get the water to flow faster when demand is high, nor store up the energy easily.) By reducing capital costs and maintenance, you see that while gross profits decrease, it's not clear that profits as a percentage of expenses do. Hence the utility boards may well not give a rate increase.

While the average cost of fuel burned will vary as the mix of fuel sources change, the marginal cost over the course of a day doesn't vary anything like the article implies

If the average cost varies, then the marginal cost must be varying even faster than the average cost. After all, you're still operating the cheaper, more efficient base load plants, but adding on the peak plants. It's simple mathematics that the marginal cost of the inefficient peak plants must be higher than the resultant average cost. Thus, I don't really see the point you're trying to make here. Using average cost pricing underestimates the shifts in cost, not overestimates, causing people to not shift enough.
1.8.2007 1:28pm
Barry P. (mail):
blcjr:

Different parts of the country operate differently, but in the PJM region, which covers an area from NJ to Illinois to Virginia, a system of marinal prices, and not costs, is employed. The price, of course, is the intersection of the demand and marginal cost curves. However, the marginal cost curve consists of both generation costs and congestion costs, and generators are not required to bid their marginal costs - they can enter any supply schedule they want into the pricing mechanism.

Also, marginal prices can swing wildly, from $20/MW-h to $300/MW-h and back again in consecutive hourly periods.
1.8.2007 2:22pm
KevinM:
Question for folks who know electricity generation (I don't): Suppose time-shifting produced maximum efficiency, i.e., a system that spread out demand over the day, permitting needs to be met with less overhead generation capacity. Would that render the system more vulnerable to collapse during, say, a prolonged heat wave, when incentive to time-shift will tend to break down?
1.8.2007 3:29pm
XON:
Well, I think Barry P. is a utility lobby sock-puppet. (With that out of the way...) I think he makes my point fairly well. Enforcing (which is what we're talking about) this is essentially requiring all utility consumers to immediately acquire a very high level of sophistication about marginal v. actual cost/prices in a highly regulated industry. As a straw man poll, how many of the regulatory attorneys here have a technically sophisticated grasp of utility business factors? How many of their clients have a professionally sophisticated grasp of both the state and federal regulatory schema?

Which brings me back to my original libertarian-type post. This is the utilities attempting to co-opt governmental coercion to extract rents by mis-characterizing entry barriers as 'the even handed demands of the market'. Also, how many people besides Barry think that it is an improvement to have to consult spot pricing of electricity before deciding to turn on the light/air conditioner/um, even computer? (to check on how much it would cost, of course.)
1.8.2007 3:41pm
markm (mail):
"I'm skeptical that enough residential energy consumption can be time-shifted to make any difference. This webpage lists the top residential electricity consumers. It's dominated by heating, air conditioning, refrigeration, and lighting -- all things that you can't easily shift to another time of day." Three of them can be shifted, at least advancing or delaying operation by a few hours. In my experience, a well-insulated house with good window and door seals will usually heat up or cool down no faster than 1 degree/hour if the power is shut off, so bumping the thermostat up or down a few degrees will shift several hours of operation. If refrigerators were upgraded with a timer in their thermostat, they could cool down a few degrees extra from midnight-6 am, hold that during the morning, then coast most of the afternoon until the temperature rose high enough to require running again. (Assuming people aren't standing there with the door open...)

Time-dependent pricing is common in Europe. Germans usually buy washer/dryers so they can set them on a timer to run after midnight when rates are at their lowest. These utilities do not set the price by current market conditions hour by hour, but rather determine a fixed schedule of prices by time of day and day of the week, so people can schedule their activities by it.
1.8.2007 4:46pm
Toby:
Many posters are right that this has been around in some form for a while. The problem is, the uses to-date have been centrally controlled. Sign up for this program months in advance, and then the Power Company controls your [water heater]. But what if I live in Marin County and feel that my hot tub / water heater is mission critical from Friday noon through Sunday? Too bad. Consumers do not want loss of control. This limits participation.

New initiatives are getting closer to changing this. There are now a couple web services protocols for building controls: oBIX and WS. The newest Windows now is able to discover such services automatically. Soon there will be software to let your PC discover and operate building systems much as they discover printers today. It is not hard to imagine an agent talking to the power spot market, talking down to the systems, reading the electric meter liveā€¦

Some of the so-called "Zero Energy" initiatives envision each building supported by multiple on-site energy collection and generation systems. Based upon the building's operating posture, and the mix of energy sources available, such a building would pull 35% or less of its total energy budget from the grid. If the facility includes local buffering and storage of electrical energy, whether this buffering is souped-up traditional batteries or new-fangled hydrogen storage, this become viable. On-site DC power generation can be stored in those batteries without the losses you would expect converting AC to DC first. If the building negotiates with the grid for spot pricing to influence the internal decisions, then it is also part of GridWise.

If future houses support DC distribution and internal use, then the batteries can become the primary source for the house. This increases the life of the batteries with no new storage technology, as it does away with the losses from converting back to DC. Most devices in modern houses are DC anyway, with very inefficient brick transformers that may convert a third of the power coming into your house to heat. The Galvin Power Initiative (www.galvinpower.org) is a good source for the engineering behind this. With appropriate local buffering, an awful lot of power consumption can be shifted to off hours without loss of occupant autonomy. Imagine running your house off batteries, charging those batteries with a mix of solar / wind / even Stirling engine, and occassionally, the power grid.

GridWise envisions a future power grid broken down into separate clearing markets for Generation, Transmission, Distribution, and Customer Face. Customers would be able to negotiate directly for green power at a premium price if they so desired. Others would be able to negotiate for the cheapest solution. Neighborhoods could opt for their own intelligent distributions systems, with higher reliability profiles than the grid provides. Customer Faces would aggregate customers with similar profiles, based on price sensitivity or reliability or social consciousness, for billing and for operation of home control systems.
The market oriented approach of GridWise is rare among energy initiatives because it anticipates driving efficiencies through heterogeneity consumer choice and thereby driving market innovations.

As the grid becomes "the thing that charges your batteries", it becomes cheaper to put alternative energies on the grid. The grid does not need to be so concerned with frequency regulation and other arcana. This means "unreliable" sources such as solar and wind can increase their proportion of the energy load without taking down the grid.

All these innovative strategies are driven by more efficient clearing of actual instantaneous energy pricing, and making it less onerous for the consumer, whether home or business, to participate. The effect on power with today's technologies and market structures, as some have said above, is limited. Hourly, or better minute-by-minute, energy pricing is a necessary precursor to developing the markets that make these strategies worth pursuing.
1.8.2007 5:18pm
Elliot123 (mail):
The real impact of this type of pricing will be felt when plug-in hybrid cars reach the market. The driver plugs the car in at night, and in the morning he can drive between 20 and 40 miles on battery power alone. After exhausting the battery supply, the gas engine turns on and the car functions just like today's normal hybrid.
1.8.2007 6:19pm
Alex R:
I'm in favor of technology, but even more in favor of simple, easy to use technology.

A complex, expensive computer system would be annoying to use and would encounter skepticism about actual payoff.

But information transmission over electric power lines is a relatively mature technology, and the bit rate required to update prices every minute or so would be very low. If the power companies sent such information over the wires, it wouldn't be hard to devise an inexpensive "cost sensor" that you could just plug in and display the current price of electricity. You could also design it so that you plug an appliance into the sensor, and only provide electricity to the appliance when the cost was below a consumer-set target price. If the technology was standard, appliance manufacturers could even include such a sensor in their product: a water heater that lowers the thermostat when the cost is above a target, for example.
1.8.2007 6:20pm
Toby:
Alex R:

The beauty of GridWise is that is favors as many technologies as we can stand. Some will favor the plug and forget aproach. Some will want the high tech aproach. Some will opt for someone else to manage it for them, perhaps even creating markets for various classes of "social" buyers, in the same way there are no "socially conscious" mutual funds. Want Cheap and don't care of its nuclear? - buyt it. Want Green and willing to pay a premium - then buy it in a clearing market that will drive more green generation.

There will be markets for both high and low rtouch energy managementOne of the Japanese hybrid cars (Honda? Toyota?) greatly increased the instrumentation last year over previous years. Why? Because they found their customers liked to see the flashing lights on the display and drove in such a way as to get more lights lit up. This dynamic will be in homes, too.

But all the market development is dependent upon getting pricing that can drive measurable cost recovery...
1.8.2007 6:54pm
Lev:
There is one thing I have wondered about for some time - daylight savings time.

It seems to me that if we want to reduce peak usages, we would want two things for the home.

1 - in the winter, we would want most activity in the home to take place during the daylight hours when it is warmest, so they can "turn down the heat" a little bit under all those blankets while sleeping.

2 - in the summer, we would want most activity in the home to take place in the twilight/early night, when the atmosphere has cooled off a bit and airconditioning etc. are not as necessary.

And that would mean daylight davings time in the winter, and reverse daylight savings time, reverse not standard time, in the summer.

Eh?
1.9.2007 12:04am
Public_Defender (mail):
It's a good idea in theory, but we need the actual numbers to judge the program in practice. Can enough households really offset enough of its use to decrease its total electic bill?

I also see some selection problems. Households where no one is home during the day (and which therefore use less electricity during the day to start off with) are more likely to sign up for the plan. Households with, say, small children at home are less likely to sign up becuase they want touse the air conditioner during the day.

That means that people who already use electicity mainly at night will get the benefit without truly shifting any power use. And people who want to use power during the day will not pay an additional penalty because they can stick with the traditional plan.

One political problem would come if the plan made it significantly more expensive for poor and lower middle-class families with kids at home to run their air conditioners during the day. On the flip side, if the plan didn't inflict enough economic pain on daytime A/C use, it might not be helpful. This contradiction is probably one reason why the programs have had problems getting off the ground.
1.9.2007 5:06am
Shawn-non-anonymous:
Alex R. :


Of course, if your home has natural gas service, better to run a gas dryer and gas water heater, as natural gas doesn't have the peak/off-peak cost differences.


This is the reason I mentioned that my electric company also owns my gas company. Florida power comes mostly from coal, nuclear, and natural gas. My bill actually breaks out the cost of natural gas in therms used and then adds on the additional costs needed to turn that into power. This change was made when the cost of natural gas was increasing and people were becomming upset with the electric company.

As hourly demand for electricity changes, hourly demand for natural gas changes. In a typical Tampa Summer, that means gas is more scarce at 3pm than 3am.
1.9.2007 9:01am
Shawn-non-anonymous:
As an aside, having lived 13 years in the Mojave Desert (Las Vegas) and now Tampa, Florida, I recommend NOT turning down your heat/AC by much when you leave for work or overnight. A few degrees, sure, but more than that may actually cost you more. Reason: mass loading. Your house has mass. It's easier to maintain that mass at a given temperature than to heat it up or cool it down by a significant number of degrees. So you leave your cool home in the Summer morning and go to work while your house raises the thermostat 10 degrees. When you get home, the house will have to run the A/C for quite some time to overcome the warmer tempuratures in your brick/stone/concrete, hardwood furniture, etc. You'll save far more money by adding insulation to your attic and sealing leaks.

One thing micro-pricing would do is change the economics of using solar photoelectrics on the roof. Since they only work during peak hours anyway, they may have a more favorable cost vs peak grid prices.
1.9.2007 9:24am
Richard Aubrey (mail):
I knew a family who had two-tier pricing.
They were religious about it, to the extent of wearing two sweaters during peak hours. Their scheme dropped the price about seven in the evening, so they could warm up the house just about the time they got ready for bed when they'd turn the heat down.
They had electric appliances and found it annoying to bake and roast long after the normal dinner hour, to shower long enough before peak hours so the replacement water was heated up on off-peak rates.
The sequence was mostly reversed on weekends, on the presumption they'd be home and not at work as was the presumption during the week. Problem was that they were retired. After some effort at making it work, they calculated they were saving pennies at some cost to their routine. So they dropped it.
Initially, it was a novelty. Then it was a duty. Then it was an annoying chore and wasn't worth it.
The point is, we have peak draw for a reason. That's when most people want it and want most of it. There's a reason they want it then and in those quantities. It's called life. To make two-tier pricing work, the savings have to justify a change in life which can be annoying.
1.9.2007 2:55pm