When electric rates are effectively designed and clearly communicated, they can be as impactful as traditional Demand Side Management (DSM) programs. By treating rates as an “always-on” asset, utilities can drive significant load reduction and defer costly infrastructure upgrades.
Key Advantages
- Scalable & Frictionless: Unlike traditional DSM, rates require no hardware installations or site visits, removing common barriers to customer participation.
- Sustainable Impact: Traditional DSM programs often lose effectiveness over time (up to 20% annually) whereas rates provide a permanent price signal and deliver reliable results.
- Data-Driven Precision: Using historical behavior data, utilities can accurately forecast demand impact and group customers into distinct “personas” for targeted effective engagement.
Proven Performance
- Load Shifting: Studies show that Time-of-Use (TOU) rates can yield a 2.5% average daily load decrease across entire populations.
- Peak Reduction: Time-Varying Rates (TVR) are proven to successfully shift 6-8% of peak usage to off-peak periods.
- Program Synergy: Layering rates with technology, such as Smart Thermostats, can boost summer peak reduction to as high as 23%.
Now is the time for utilities to expand their view of DSM to include scalable, ubiquitous electric rates. By clearly communicating bill impacts in “dollars and cents” and recommending “ways to save”, utilities can align customer behavior with grid needs and achieve long-term operational and regulatory goals.
