Why don't electric utilities charge lower rates when demand is lower

Factual Questions
41

Yes, It seems @Filbert & I were talking past one another.

The utility consumption management features attached to US tank-style hot water heaters & HVAC systems typically leave your downstream device(s), whatever they are, active 24/7/365. Until the utility needs to trim demand. Then you device(s) shut off for a few minutes per hour. How many is a “a few”, and how much total time they can leave your devices off varies on demand.

The result is they can deliver a “rolling blackout” to enough e.g. HVAC’s on a hot summer afternoon to avoid overloading their grid, and most people’s HVAC unit is not off long enough to matter to their indoor temps much before the “blackout” moves to their neighbor’s house & their own HVAC restarts.

As noted, the USA is an absolute patchwork of dozens to hundreds of utilities, regulatory regimes, climates, power abundances, power prices, and social / economic attitudes. These power management devices are offered by many utilities in many places for many years now, and uptake varies widely. But they are not rare or unheard of. Pretty common actually, and more so in the areas with high electrical consumption and also high population growth.


OTOH, one of the residences I used to own had been extensively remodeled by a guy who evidently was an amateur Mad Scientist. This device resembles @Filbert’s situation and was one of his least wacky innovations:

There was a tanked water heater that fed the master bathroom & a second similar bathroom. That was ordinary enough. But he had it on a mechanical 24 hour timer akin to this example Amazon.com: DEWENWILS 24-Hour Mechanical Timer Switch . The utility there then did not have time of day billing. He had it set up to only run from like 5am to 8am. He claimed that gave him hot enough water for his morning routine, was warmish enough for his evening routine, and otherwise saved scads of money.

My work / life schedule was variable enough from day to day that I wanted (needed?) nearly 24/7 HWH. So I removed the trippers from the dial & just left it there as an auxiliary on/off switch for the HWH.

42

In the U.S., this sort of thing mostly happens in the northeast and southwest, since those are the areas of the country with the highest population density and the highest power demands. California seems to be the worst for it. Texas, being on its own separate grid, is also vulnerable.

In many areas the situation is getting worse due to AI datacenters popping up all over the place and consuming vast amounts of power. A lot of aging coal-fired power plants have also been retired in recent years, which reduces the available power, making things worse.

43

An alternative billing method I saw, mainly for businesses, was also peak metering. You were charged for the electricity you used, and in addition a rate based on the maximum total draw you put on the system at any time during the month. One fellow I worked with was wondering if there was a system he could install (back in the good old days, around 1985) - their church had 3 different independent electric furnaces for three areas. He was wondering about a device to ensure they did all come on at the same time. Similarly, some fellow who managed the small community ski hill outside of town was annoyed one year that the volunteer crew had turned on the furnace for the chalet before the end of the billing cycle, while they were still running the snow-making pumps, instead of using the wood stove.

44

It may have been referring to long distance telephone rates which were lower beginning in teh early 60s.