Dynamic Electricity Billing

The nature of a power grid is such that the more power you have to generate at once, the more expensive every bit of power is.

There are a few good reasons for this:

1. As the demand rises, the power companies have to generate more power from older, dirtier, and less efficient power plants. These plants take produce less power for each dollar it takes to run them.

2. As a seasonal effect - fuel becomes more expensive when demand rises. Coal and gas are most susceptible to fuel prices. (Solar power is actually cheaper at peak times because peak times are hot sunny afternoons, when solar cells are most effective.)

Thus, it might cost $1,000 to produce the first megawatt of electricity, but $1,500 to generate a second megawatt.

When Demand Rises

The demand for electricity rises to its highest during the day between noon and six on summer days as homes and businesses are all running air conditioners. At night demand falls because outside temperatures drop and air conditioners don’t have to work as hard.

The other limiting factor of the power grid is that enough power plants need to be built to supply people at the maximum load time. This means that the power grid is frequently operating well below capacity. It also means that the limiting factor on how many power plants we need is strongly associate to the number of air conditioners running on the hottest summer days.

That’s not to say other things don’t require electricity too – but overall, its air conditioning that causes significant fluctuations in demand.

(Lighting doesn’t cause as much of a difference as you might imagine – mostly because businesses run their lights during the day while homes tend to run their lights at night.)

How Pricing Will Change

One change the electric suppliers have learned from the telephone industry is basing their rates on time of day. In the future, you’ll get billed a higher rate in the afternoon than at night. As a homeowner this is good news, since you can just push up your thermostat when you’re away from work, and overall your bills will drop. Businesses on the other hand will have to start thinking about more efficient electricity usage if they want to keep electrical costs down.

But maybe that’s a good thing.

As rates rise, demand will fall. A certain portion of people will turn up their thermostats knowing that it will cost them extra otherwise.

This will allow more old power plants to run at lower capacity on peak summer days. It’ll decrease the amount of coal and oil power companies need to buy to run their plants, which will lower the rate overall. In turn, the best plants will be providing the most power which will also moderate prices. This might even also quicken the speed for the oldest plants to get decommissioned in place of newer supplemental power plants, such as solar, which run best on peak days. Wind is also an option in many areas.

We’d be trading our most expensive and polluting plants for renewable energy. Or at least much cleaner coal plants.

Though I’d personally prefer a power plant that didn’t emit greenhouse gasses.

Tracking Your Electricity Usage

A while back I thought about ways to improve energy usage - and taking away a concept I've learned from my profession - is that you can't do a good job improving something if you don't know exactly what's wrong with it.

That lead me to the idea of installing web-cameras with image recognition that constantly viewed my Electric, Gas, and Water meters. Then I'd have a program running on a computer reading from the web cameras, and graphing the data in real-time.

Thus, I'd always have real-time access to my energy usages, and it'd be able to really easly tell how much a hot shower cost me in real dollar terms -- or whatever other household activity I was doing.

The idea then would be to make this preatty cheap to build and install. Then improve the software to the point where it quickly points out likely problems in a user's energy usage.

I think a lot of people would improve their energy usage if they had much more frequent data than they get from their monthly bills.

Fortunately, the electric company where I live has an online interface that will give you daily usage in kW.

Though its not as good as hourly data might be, daily trends are very helpful because I can remember on particular days what I was doing that might have used more or less and get a feel for how much certain activities are costing.

It might even make me think twice about running the dryer for a few extra minutes next time.