How Changes to Time of Use (TOU) Rates are Impacting Commercial & Industrial Customers
by Jim Dodenhoff, Principal at Silent Running, LLC
Thursday, October 22, 2020 | 2:00-3:00pm (EDT)
The significant penetration of solar energy in the electricity supply mix, especially in Western U.S. states, has resulted in profound changes to the shape of electricity system load curves. In the past, utility electricity suppliers with summer peak demand generally found their load peaking from mid-day to late afternoon. These same geographic areas have also been the most attractive candidates for solar implementation. The net effect has been a shifting of system net daily peak period to later in the day: spanning mid-late afternoon to early-late evening.
A guiding principle behind most ratemaking is to have electricity rates reflect real-time system costs. This provides higher pricing signals to the customer when the system has less available supply of electricity. Many utility tariffs are now either incorporating Time-of-Use (TOU) tariffs and/or moving their peak periods to later in the day to more accurately reflect net system peak and the impact of significant solar supply. These changes can have large cost impacts on Commercial & Industrial end users who have significant load in the evening hours.
This presentation will model these TOU tariff changes in California and other Western geographic areas. Energy management technologies such as energy storage and advanced controls will be analyzed as potential solutions to mitigate increased costs from TOU tariffs.
Finally, the carbon-intensity of unique utility electricity grids will be analyzed in the context of TOU peak periods. The author will present findings showing whether purchase of utility electricity during daily peak periods buys into a higher carbon emitting generation fleet, and to what degree.