Lowering Electricity (Commodity) Costs
Smart meters are special electricity meters capable of tracking and reporting hourly electricity use. Currently,
consumers without smart meters don’t have much financial incentive to manage their electricity use over
the course of the day. Because smart meters possess the ability to capture hourly customer usage data, they actually
change this by allowing regulators to introduce special Time-of-Use pricing
to incent customers to shift their demand patterns.
Time-of-Use pricing sets a higher price at peak periods when the cost of electricity in the wholesale market
is highest. This incents consumers to reduce or shift their use away from these times to periods of lower demand
and lower costs.
Consumers will not be able to shift all of their electricity use away from peak demand periods, but the more they
are able to do so, the more they can manage their costs and contribute to lower overall peak electricity prices
for everyone