California Center for Sustainable Energy

Dynamic Electricity Pricing & Metering

Improving Resource Use By Optimizing Supply vs. Demand

There is a growing movement to change how consumers are charged for electricity. The idea is to charge different prices at different times of the day to correspond to more and less expensive cost periods for producing a kWh. This would give consumers the feedback and forecasting mechanisms to allow them to respond to changing market and system conditions.
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Tips On Saving Gas

San Diego gas prices are the highest in the country and now that OPEC announced it’s cutting oil exports by another four percent, prices are getting worse. With that in mind,  CCSE offers some tips on saving gas and saving dollars.
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J&JPRD Powers R&D
Facility Expansion With New “Green” Cogeneration System

Green Power project gets $800,000 rebate from San Diego Regional Energy Office

Johnson & Johnson Pharmaceutical Research & Development, L.L.C. (J&JPRD) on March 23, 2004 officially dedicated the installation and operation of a new environmentally responsible combined heat and power ( CHP) cogeneration system, as part of a major research and development (R&D) expansion at its La Jolla facility.
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Dynamic Electricity Pricing & Metering

There is a growing movement to change how consumers are charged for electricity. The idea is to charge different prices at different times of the day to correspond to more and less expensive cost periods for producing a kWh. This would give consumers the feedback and forecasting mechanisms to allow them to respond to changing market and system conditions. 

Remember the power crisis of 2000-01? If it weren’t for the remarkable efforts California consumers made to conserve electricity during the power crisis, electricity bills during that period would have been much worse.  In fact, some noted that there hadn’t been such comparable voluntary conservation results since World War II.  However, some of that urge to conserve has since declined and many believe the full potential of energy conservation and efficiency activities cannot be realized until there is a paradigm shift in electric pricing and metering for energy consumers. Conservation and shifting load from peak periods reduces the need for new power plants and transmission lines, minimizes costs and lowers pollution from power production.

Residential consumers are charged for electricity today much as they were 100 years ago -- through an electric meter checked once a month.  Indeed, the basic concept hasn’t changed much since Elihu Thomson designed and sold the first commercial recording watt-hour meter in 1889. 

All utilities have historically charged fixed average prices for electricity. SDG&E’s residential sector is served under inverted-tier block rates, which provide incentives to lower total monthly electricity usage by charging higher prices as monthly usage increases.  But this is not enough to truly impact energy consumption.

Consumers can only guess how much they are using at any given time and have no idea what it costs to produce that power. In addition, the utility typically charges the same price for each hour of every day of the month even though the true value (and therefore cost) of the electricity is typically higher during weekday afternoons.

Imagine purchasing gas for your motor vehicle without knowing how many gallons you pumped or what it cost because there were no indicator dials on the fuel pump.  You’d only find out a month later when receiving your bill after you’d traveled thousands of miles on that vacation trip. If you had known what prices really were, you might have thought twice about visiting Aunt Mabel 200 miles out of the way.

With your building’s current electrical meter, you probably don’t know that someone’s taking those “extra trips” daily – whether it’s leaving the lights on longer, lowering the temperature of the air conditioner, turning on extra appliances, and so on.  As indirect as that sounds, this is how the power market functions on the demand side.

Further, utility customers typically do not save any more money by using less electricity during peak demand periods than if they used the same amount during early morning hours. They are charged the same whether they use 100 kWh to run their pool pump from 6am-12pm as they are if they run it from 12pm-6pm when it actually costs the utility more.

"Real-time" meters that accommodate hourly price changes would give consumers an incentive to conserve and reduce the need for peak-load plants.  Many commentators have noted that a contributing factor to the California electricity crisis was that consumers had little incentive to conserve power during peak periods. That is because they do not see a “real-time price” equal to the cost of electricity at the time they use it. As long as consumers pay the same price for electricity regardless of when they use it, they have little incentive to conserve at times of the day when power plants are straining to keep up with demand.

Of course, this is only part of the necessary package.  Although advanced metering may be capable of providing usage and demand on a real-time basis (or at frequent intervals in “near real-time”) the user still needs to be able to see the information - whether through a web-browser, electronic display, or via phone to an automated system.

In March 2003, California Public Utilities Commission ( CPUC) Decision 03-03-036 ordered the investor-owned utilities to conduct a "Statewide Pricing Pilot" to test Critical Peak Pricing (CPP) tariffs and supporting control technologies for residential and small commercial customers. This pilot was formulated to gather information on customer price response, the impact of automated controls equipment on household peak demand, the impact of information and feedback on household peak demand, and customer acceptance of and preferences for different types of dynamic rates. The pilot commenced in July 2003 and is scheduled to end in December 2004. So far, initial findings have been favorable.

However, critics respond that residential and small commercial customers do not have usage patterns that allow them to shift significant amounts of load from peak times to the off-peak period. Thus, they argue, CPP will result in higher bills for many consumers who can least afford it.

Additionally, these “smart meters” are much more expensive than those currently in use. And there are technical and communication changes that will need to be made to allow the installation of millions of these meters across the utility system. All this will cost a significant amount of money which would be paid by utility consumers.

In conclusion, with the necessary rate structure, tools and technologies – consumers are apt to be more proactive in planning how much energy they use and when they are using it, and utilities would have additional methods of understanding and responding to critical peak demand periods. But to get to that point will demand significant changes not easily accomplished.

We should see the results from the pilot projects sometime in 2005. Stay tuned. 

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Tips On Saving Gas

San Diego gas prices are the highest in the country and now that OPEC announced it’s cutting oil exports by another four percent, prices are getting worse. With that in mind,  CCSE offers some tips on saving gas and saving dollars. 

WHILE DRIVING

▪ Slow Down! -- Each 5 mph you drive over 60 mph is like paying an additional 10¢ per gallon for gas. Using cruise control on the highway helps you maintain a constant speed and, in most cases, will save gas.
▪ Take it easy -- Aggressive driving (speeding, rapid acceleration and braking) wastes gas. It can lower your gas mileage by 33 percent on the highway and by 5 percent around town!
▪ Avoid Excessive Idling -- Idling gets 0 miles per gallon. Cars with larger engines typically waste more gas at idle than those with smaller engines.
▪ Use Overdrive Gears – In overdrive, your car's engine speed goes down. This saves gas and reduces engine wear.
▪ Lighten your load –Over-weighted cars use more gas. Also, using your trunk or cargo space rather than a roof rack reduces drag -- another way to save on gas.
▪ Go easy on the AC--When possible, close the windows & use the vents to bring in outside air.

KEEP THAT CAR IN SHAPE

▪ Keep Tires Properly Inflated -- You can improve your gas mileage by around 3 percent by keeping your tires properly inflated. Under-inflated tires can lower gas mileage by 0.4 percent for every 1-psi drop in pressure of all four tires.
▪ Forget about Premium -- Unless your owner's manual recommends it, there is no need to buy it. Premium gas sells for an average of 17 cents more per gallon than regular gas. Check your owner’s manual for what octane you should be using.
▪ Keep Your Engine Properly Tuned -- Fixing a car that is out of tune or has failed an emissions test can improve gas mileage by an average of 4.1 percent. If your car has a faulty oxygen sensor, your gas mileage may improve as much as 40 percent.
▪ Check & Replace Air Filters Regularly -- Replacing a clogged air filter can improve your car's gas mileage by as much as 10 percent.

PLANNING YOUR TRIPS

▪ Combine errands into one to trip -- Several short trips taken from a cold start can use twice as much fuel as a longer multipurpose trip covering the same distance when the engine is warm. 
▪ Avoid Rush Hour -- If you can stagger your work hours to avoid peak rush hours, you can avoid more of the ‘stop and go’ traffic and consume less fuel.
▪ Take the car with the higher fuel efficiency –- If you own multiple vehicles, drive the one that gets the best gas mileage whenever possible.
▪ Carpool – Take turns driving to work or school by carpooling or joining a ride-share program. This can cut weekly fuel costs in half and save wear on your car. Cars with 2 or more passengers can take advantage of the special High Occupancy Vehicle (HOV) lanes.
▪ Consider telecommuting –- If your employer permits it, working at home cuts down on mileage.

Next time you’re shopping for a new car, choose a more efficient vehicle -- The difference between a car that gets 20 MPG and one that gets 30 MPG amounts to $1,500 over 5 years, says DOE (assuming a fuel cost of $1.50 per gallon and 15,000 miles per year). 

For more on mileage estimates, gas prices and gas-saving tips, check out the US EPA and Department of Energy website www.fueleconomy.gov.

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J&JPRD Powers R&D Facility Expansion With New “Green” Cogeneration System

Johnson & Johnson Pharmaceutical Research & Development, L.L.C. (J&JPRD) on March 23, 2004 officially dedicated the installation and operation of a new environmentally responsible combined heat and power ( CHP) cogeneration system, as part of a major research and development (R&D) expansion at its La Jolla facility.

The 2,200 kW system will produce 15,000,000 kWh/ YR of electricity plus 360,000 therms of heat and 1,600,000 ton-hr/ YR of chilled water, providing more than 90% of the facility’s electric power and much of its heating and cooling needs.  Not only does this green power project offer significant air pollution reduction and energy savings to the San Diego region, but it also will allow the R&D facility to fully operate independent of the State of California’s electrical grid, if necessary.

“There are so many benefits to cogeneration.  Innovation is at the core of our R&D efforts, and so we’re pleased to be using this cutting-edge cogeneration technology to power, heat and cool our new laboratories,” said J&JPRD Senior Vice President of Drug Discovery, U.S., Michael Jackson.  “We’re saving money, but we’re also helping to reduce greenhouse gases in the environment by the avoidance of more than three million pounds per year of CO2.  Plus, the savings in electricity and natural gas will be over $1,000,000 per year.”

The system was installed in two 1,100kW phases, with a California Center for Sustainable Energy( CCSE) incentive helping to fund phase one.  During her presentation of the large ceremonial check to Jackson,  CCSE Executive Director, Irene M. Stillings, explained that the incentive came from CCSE’s Self-Generation Incentive Program, which helps fund large “self-generation” or onsite generation projects.  Stillings said, “Self-generation reduces electricity consumption from the grid, reduces the need for new infrastructure and helps the environment. This project is great for the San Diego region.”

The ceremony also featured key speakers; Scott Peters, Council Member for the City of San Diego, Jackson, Stillings, and Seema Kumar, Vice President of Global Communications for J&JPRD. 

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