Smart Meters and Dynamic Pricing Need Each Other – Paper

Smart meter deployment is underway in Illinois and since electricity customers pay a monthly fee to support smart grid deployment, questions have been raised on the benefits of smart meters and an eventual smart grid. Hourly pricing can provide immediate consumer benefits to residential customers.

Since 2003, Elevate Energy has administered residential hourly electricity pricing programs for ComEd and Ameren Illinois. The results are tremendous: average electricity supply savings of over 15 percent and a price elasticity of over 2.5 percent. The programs also help those who need it most, including retirees and low-income households. In addition, participation in hourly pricing helps lower capacity charges for all customers and reduce greenhouse gas emissions.

But hourly pricing adoption remains low among residential customers with fewer than one percent participating. Will the onset of smart meter deployment drive greater adoption of dynamic pricing?