To help consumers save money at peak times, the California Energy Commission (CEC) has created new load management standards this month, to be implemented in April 2023. These will give users more timely and accurate information on electricity costs, to help them manage their energy use – especially when demand on the grid is high. This new legislation is expected to produce $243 million in net benefits over fifteen years and could reduce annual peak hour electricity use by 120 gigawatt hours.
The new standards will help users take better advantage of utilities’ lower time-dependent rates so smart appliances will benefit and buildings can automatically respond to more frequent rate changes that reflect electricity grid conditions. This will save consumers money by enabling them to shift usage to times of cheaper or abundant electricity. The emergence of a better-balanced grid is expected to reduce the rise of electricity costs, curtails the need for more fossil fuel power stations, and avoids electricity transmission and distribution congestion.
“This update is a huge leap into the 21st century, using digital approaches to unlock benefits for consumers by enabling them to automate their electricity use around cheaper rates and changing grid conditions,” said California Commissioner Andrew McAllister. “Automated load management reduces energy bills, makes better use of abundant renewable energy resources available during the day, and strengthens grid reliability.”
Various state utilities, including Southern California Edison Company, Pacific Gas and Electric Company, Sacramento Municipal Utility District and others, will need to make the following improvements:
- Develop retail electricity rates that change at least hourly to reflect grid costs and greenhouse gas emissions
- Maintain up-to-date rates in a database called the Market Informed Demand Automation Server (MIDAS), which will provide a central location for all rate information
- Educate customers about time-dependent rates and automation technologies to encourage their use
These changes will introduce fairer compensation mechanisms, thus benefiting consumers so they can use electricity at the best moment for them, and will lower energy costs for all users by reducing peak electricity demand.
