New Smart Grid Law Will Enable Real Savings on Electricity Bills
If the results of an Ameren Illinois program is any indication, the electric grid modernization components of the bill approved yesterday by the Illinois General Assembly could enable consumers to reap savings on their electricity that will more than offset the bill’s estimated $36 per year price tag for households.
The downstate Ameren program, made possible by the smart grid technology that will become widespread as a result of the new law, has saved more than 11,000 customers an average of 25 percent on the cost of their energy supply compared to what they would pay on a standard rate plan. The savings translates to nearly $200 on average savings per year, with typical households paying around $100 per month before switching to the program. Program participants have saved more than $4 million since it began in 2007.
“The smart grid can facilitate the use of smart rates that save people real money,” said Anne Evens, director of CNT Energy, which administers the Ameren program. “Based on our experience, when grid modernization technology is combined with clear, ongoing customer education, it can help customers make good choices about their energy use and take control of their utility bills.”
“Dynamic” programs like Power Smart Pricing and ComEd’s Residential Real Time Pricing program are designed to help customers save money by giving them access to hourly, market-based electricity prices. While these prices vary, often the market-based price of electricity is lower than the price under the standard residential rate. Prices tend to be low most of the time during the fall, winter and spring, and can be higher on summer afternoons. Customers can increase their savings by taking simple actions to conserve electricity during the hours when prices rise. Dynamic pricing programs are made possible by modern grid technology, such as smart meters, that enable more precise and effective energy management than traditional meters.
“Dynamic pricing works a bit like a cell phone plan that gives you lower prices for nights and weekends, but you get even more times when prices are low,” says Evens. “For many people it’s an easy way to save on household bills. Soon ComEd residents will have the ability to take advantage of dynamic pricing and start saving.”
In addition to helping customers cut costs, data from Ameren’s Power Smart Pricing has shown that participants reduce their electricity usage during hours when demand for electricity is highest. This eases stress on the electric grid, and can help reduce the cost of power for all customers by reducing the amount of expensive peak power that the utility must buy.