Electricity Power Generation Is Not Cheaper at Night

Let me say this again. Electricity Generation is NOT cheaper at night. It doesn’t matter who tells you that it is. Let me say it again. Electricity is not cheaper at night. Yet, this lie continues to be passed around as fact. As one current administration has found, the way to make a lie true, is just to keep repeating the lie over and over again. So this lie is now fact.

The March 20th, 2007 "Backstory" of the Christian Science Monitor picked up and repeated this often heard lie as though it were true. You would think that a prestigious newspaper like the Monitor would do some fact checking, but the myth that they repeated has become so prevalent that the true story I am about to relate to you may seem hard to believe. Honest it is true, I was there.

The repeated lie was blurted out in an otherwise inspiring article about electric cars and their ability to reduce harmful emissions as well as reduce owner operating costs by charging batteries at night. Correspondent Frank Kosa wrote, " Cars are usually charged at night when electricity is cheapest". His statement is only true for those customers that sign up for special rates with Southern California Edison which serves the Santa Monica California area.

Here is the true story. It happened when I used to work for an electric utility. One of my customer service representatives buzzed me on the intercom one afternoon saying she had an angry customer on the phone demanding to speak to a manager about their electric bill. Since I was the employee’s supervisor, it was my job to work with the angry customer. I took a deep breath, consulted my handy wallet size helper " How to deal with angry customers" and pushed the phone button. " I am being ripped off by you people and I want you to make an adjustment on my bill", the angry voice shouted through the phone.

Step One, left the customer speak. He continued, "I read in the paper where its cheaper to use electricity at night and exactly thirty days before the end date of this bill, I started making sure that all of my electricity was used during those hours posted in the paper for night time rates". And , the voice said with a quick gasp for air, "my bill was just the same this month as it has always been. You need to do something".

Step Two - Make sure you really understand the details. "So", I said calmly. "I can tell that you are really upset. Just let me ask you a few questions to make sure that I really understand your situation". " For over thirty days you made sure that you used electricity only between the night time hours by turning off your breakers and equipment during the day. After doing this you expected your electric bill to go down, is that correct?" "Your damned right", he jumped back.

"OK. I understand", I assured him. "When our customer service representative told me that you were on the line, I pulled up your billing record and I can see that you are right, your bill really is about the same as it was last month". "I also see that you are on our general service residential rate".

I went on to explain that our general service electric rate, like most every residential rate in the nation, charged the same amount per kilowatt hour (kWh) no matter which time of day he used electricity. I continued to explain that in order to get cheaper rates at night the customer needed to sign up for a special Time of Use or Off Peak Rate and have a special residential meter installed that could keep track of when electricity was being used at his location.

So for all of you that have been watching the clock and maddly flipping power switches on or off at appointed times please stop and make sure that your efforts will be rewarded. It is not and never has been a matter of just using the juice at night. If you are not on a time of use or off peak rate you are wasting your time. Here is how it works, more or less.

Electric Utility Transmission and Generation Companies (G&T’s) or wholesale power suppliers, gain incredible efficiencies and therefore save big bucks when they can keep their power generation plants running at a constant medium speed. If they have to ramp things down for low load periods they loose money. Like wise, when they have to ramp things up or buy spot market generation to meet higher than expected loads they also loose money.

Steady as she goes provides the optimal operating cost environment when it comes to power generation. The problem is, that is not how we use electricity. When you look at your utility’s line graph of power or kilowatt hour (kWh) sales in 24 hour increments, you will always see ups and downs. And, if you compare consecutive 24 hour periods you will see a pattern of energy use that generally repeats itself day after day all year long. There may be some changes seasonally in cold or hot climates but even those peaks and valleys have a pattern. How else do you think the G&T’s know how much coal or gas to buy and when to pour it on the fire? Utility executives call this dispatch-able power.

This is one reason that many utilities seem opposed to Renewable power generation facilities connected to their systems. They are never real sure when the wind will blow. And, they are pretty sure that the solar panels will go down with the sun, just when they need that evening peak power as you get home from work. That’s why they call these two renewable energy sources non-dispatch-able.

G&T’s usually bill their distribution companies, that’s the folks you buy your power from, two ways. They bill on the total kilowatt hours used during the billing period, called total kWh or "energy". And, they bill on the highest peak energy of Kilowatt demand for the month , called Peak KW or "demand". That peak demand almost always occurs during the same time as the daily peaks for energy use that season. So, if your utlitity can shave the size of the KW peak at that time, they save money. As an insentive to get their customers to help them shave that peak, they offer Time of Use or Off peak rates hoping that you will sign up and help them cut their power bill. If it works they can pass the savings on to you.

But, BIG BUT, you have to sign up for the rate. These are special rates and you need to sign up for two reasons. One, you will need a more sophisticated and expensive meter that can document the kWh used during the Off Peak time as well as the kWh used during the On Peak time. Sometimes this means you must pay a higher minimum monthly service charge so don’t forget to factor that into your calculations. Two, you probably need to agree to pay a penalty or higher rate for kWh used during the On peak time. If they don’t offer a real incentive to get you to use your power Off Peak, why bother?

For example in Santa Monica Southern Cal Edison has a Time of Use rate for homes where most electricity is used between 6:00 PM and 10:00 AM. Other utilities may offer two off peak times during the day depending on their daily load profile. Southern Cal Edison also offers a special rate for electric vehicles for homes where qualifying electric vehicles are charged..
Customers that have automated equipment to turn their equipment on and off have lower bills than customers that try to match the Off Peak times on their own manually. People forget or get sick or take holidays. Programmed time clocks and equipment are well worth the expense if your lifestyle can handle the restrictions of your local utility’s special rates. The best thing to do is call and talk to them about your plans ahead of time. Make sure that your hard work and money will be rewarded with real cost savings on your utility bill.

I repeat "electricity is not cheaper at night", unless your utlity has a special rate and you and your house are signed up for it.

Is Your Electricity Subsidized?

While the term "subsidy" has taken on derogatory implications, the fact is that in spite of our so called free market economy, most of the things we buy, including electricity have some financial help from Uncle Sam. It may be a simple adjustment in federal taxes or tax credits available for certain industries, it may be federal funding of research and development, it maybe discounted loan programs. What ever it is, from automobiles to grapefruit, there is something that someone can call a "Subsidy". Investor owned utilities(IOU’s), municipal owned utilities (MUNI’s), and member owned utilities (COOPS) all get subsidized in some way. So, get over it.

The question you should ask is not who gets a subsidy , but rather who benefits from the subsidy and do those subsidies support industries that are good for the long term health of the nation and the World? In the case of electricity generation, they do, if you believe that price is all that matters. Our electric rates nation wide would be higher, maybe much higher, if it were not for the maze of tax incentives and benefits available to those making electricity.

Our collective sense of things is that the big guys, king coal, nuclear power and natural gas get bigger subsidies then the little guys like wind, solar, energy conservation and bio fuels. And, if you thought that, you, would be right. In a year 2000 Federal Report (Number SR/OIAF/2000-02 http://www.eia.doe.gov/oiaf/servicerpt/subsidy1/index.html ); the numbers show that in 1999 base load generation from fossil fuels was supported 2.2 times more than energy conservation and 15.35 times more than renewable technologies.

According to the executive summary of the 2000 report, "Federal subsidies for transformation and end-use activities are estimated to be $2.2 billion in fiscal year 1999, a decline of about 10 percent in real terms from the total found for similar items in fiscal year 1992 (Table ES1 and Figure ES1).execsummary_fnotes.htmlIt is estimated that direct subsidies--the sum of direct expenditures and tax expenditures--totaled $1.8 billion in fiscal year 1999, of which direct expenditures totaled $1.4 billion. R&D subsidies accounted for the remainder, just over $0.45 billion."

The 2005 Energy Act promises to promote energy conservation and renewables, yet so far the amount of support and subsidy still weighs in heavier for coal(big emphasis on clean coal technologies) and nuclear energy than it does for conservation and renewables.
Meeting the electric energy needs of this nation will require subsidies on a more even playing field that will help fledgling industries compete against the old timers decades of federal support. Clean coal, safe nuclear generation, hydro- electric production, and renewables must all be evaluated for the contribution that they can make to meet the needs without creating long lasting environmental programs. But, this wont be cheap.
Residential electricity rates across the nation have increased faster than the Consumer Price Index for many years.
Consumer Price Index Increase - All Urban Areas
2003 -1.9%
2004 -3.3%
2005 - 3.4%
2006 - 2.5%
Four Year Annual Avg
2.8%
US Department of Labor Statistics ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

Average Retail Price of Electricity to Consumer
Year Cents/kWh Percent increase
2003 8.72 3.32%
2004 8.98 2.98%
2005 9.46 5.35%
2006 10.46 10.57%
Four Year Annual Avg.
5.55%
Source: Energy Information Administration http://www.eia.doe.gov/cneaf/electricity/epa/epat7p4.html#_ftn2

Get used to rising rates. There is no way we can move into an era of less dependence on fossil fuels without paying more at the meter.

Recent claims of victory by environmental groups over the apparent retreat of TXU investors over plans to build 11 new coal generation facilities, could be hollow chest thumping, if other generation sources don’t surface to meet the need. Sure, TXU may have over-estimated load growth, just to look like good guys when they agreed to stop plans for 8 coal plants, but some day load will exceed supply if current trends continue.

Changing the paltry contribution of renewables to the nation’s generation fuel mix will take a lot more than chasing off coal plant investors.