Residential Real-Time Pricing: The Energy Smart Pricing Plan

Kathy Tholin, Larry Kotewa, and Anthony Star, Community Energy Cooperative
Michael Ozog and Mark Thornsjo, Summit Blue Consulting
Lisa Skumatz, Skumatz Economic Research Associates, Inc.

Keywords

Abstract

The Energy-Smart Pricing Plan (ESPP) was started in January 2003, and was the first time in the nation that residential customers were given the opportunity to pay market-based electricity prices. By exposing residential customers to the market-price of electricity, customer’s are given the opportunity to make informed decisions about electricity use. This program uses Commonwealth Edison’s (ComEd’s) experimental Residential Hourly Energy Pricing (RHEP) rate. In addition to the hourly electricity price, participants receive a distribution charge which is currently capped at 4.88 and 5.367 cents per kWh for single family and multifamily homes, respectively. Program participants’ rates are reduced by 1.4 cents/kWh as a participation incentive. Through this feature, participants could save about 10% of their current electric costs even if they do not change their energy use patterns at all in response to the hourly energy prices.

This paper presents the quantitative and process assessments of the ESPP using statistical modeling of hourly consumption data and survey responses. Through this evaluation, we have found that residential customers do indeed respond to hourly price signals, even relatively small ones.