Pricing electricity using technology

Journal Article · Tue Jan 01 04:00:00 EST 1991 · Public Utilities Fortnightly; (United States)

OSTI ID:6203091

Beyer, M C

Trends in the environment, electricity production, and telecommunications and information systems suggest that this is a propitious time to investigate a new method of pricing electricity. The following proposal may have sufficient merit to attract recognition and acceptance by diverse interests including energy consumers, utilities, and environmental groups. Essentially all electricity sold to large customers would be priced based on its cost of production at the time it is consumed. Users would know the price of electricity via real time communications links between the generating dispatch control center and the user. When electricity demand is low (the grid is being supplied by hydro, nuclear, and coal power), prices would reflect these relatively low costs. Conversely, when demand is high (the grid is being supplied by combustion turbines burning oil and gas), prices would reflect these relatively high costs. The concept is to price electricity based on its production cost, which varies by time of day and from day to day depending on demand and available power sources. Utilities run generators with the lowest marginal cost first and start more expensive units as demand increases so as to maximize economy of service.

• OSTI ID: 6203091
• Journal Information: Public Utilities Fortnightly; (United States), Journal Name: Public Utilities Fortnightly; (United States) Vol. 127:1; ISSN 0033-3808; ISSN PUFNA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
296000* -- Energy Planning & Policy-- Electric Power
COST
DEMAND
ELECTRIC POWER
ELECTRIC UTILITIES
LOAD MANAGEMENT
MANAGEMENT
OFF-PEAK POWER
PLANNING
POWER
POWER DEMAND
PRICES
PUBLIC UTILITIES
RATE STRUCTURE
REAL TIME SYSTEMS
TIME-OF-USE PRICING