Driving Increased Adoption
Sanem Sergici is a Principal in The Brattle Group's Boston office with expertise in electricity markets and applied econometrics. Eva Molnar is Senior Manager at Southern California Edison. Scott Engstrom is Chief Customer Officer at GridX.
For a very long time, the lack of advanced metering was the barrier in front of a broader deployment of time-varying rates, but that barrier has been mostly removed. Across the United States, roughly eighty percent of residential customers have advanced metering infrastructure (AMI) installed as of the end of 2021.
A growing number of utilities are using the data collected from these meters to develop modern rate structures that encourage customers to shift their energy usage to times of the day when it's lowest cost or cleanest.
We are witnessing a change in momentum in the adoption of these time varying rates, which is driven in large part by the increased need for load flexibility. The type of load flexibility required for dynamic system balancing in a decarbonized grid will need to go beyond the traditional energy efficiency or demand response programs that focus primarily on total energy or peak load reduction.
The ability to modulate load in response to price signals can yield substantial benefits to all customers. This has prompted more utilities to consider various strategies for deploying time varying rates, ranging from default deployments, as done by Southern California Edison (SCE), or testing these rates in limited pilot settings.
But to be truly effective from a system resource optimization perspective, we need to get more people on modern rates and ensure a positive customer experience in the process.