Time to save: How time-of-use rates reduced peak

The growing penetration and increased capabilities of smart meters are creating opportunities for more widespread implementation of alternative rate designs that more effectively communicate to customers when it is less costly to consume energy. Rate design can be a component of an overall demand-side management (DSM) and DER plan that can address system needs and reduce costs while achieving the primary goal of rate design: to effectively balance the costs of providing a service with the revenues recovered from the customers using that service.

In this perspective, ICF experts explain how:

• Increased penetration and capabilities of smart meters enables alternative rate designs.
• Time-of-use rates can reduce system peak while holding utility revenues constant.
• Utilities can optimize rate design with other demand-side management or distributed energy resources (DER) to achieve defined targets.