Catalyst with Shayle Kann cover image

Catalyst with Shayle Kann

Are utilities ready to fully harness demand flexibility? [partner content]

Feb 4, 2025
Utilities are at a crossroads, shifting from merely selling energy to embracing demand flexibility. This crucial change can stabilize grids powered by intermittent renewables but requires innovative rate designs and effective customer incentives. The aftermath of Winter Storm Uri has highlighted the need for adaptable pricing strategies and technology integration like IoT and AI. As utilities seek to achieve decarbonization goals, understanding diverse customer needs, particularly low-income households, will be vital for equitable energy management.
30:49

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Quick takeaways

  • Utilities must transition from a supply-centric mindset to one that embraces demand flexibility for effective grid management.
  • Implementing equitable time-varying rates requires utilities to prioritize customer education and personalized programs to mitigate potential financial impacts.

Deep dives

The Shift Towards Time-Varying Rates

Recently, there has been a notable increase in utilities adopting time-varying rates to manage demand and provide value during peak times. For instance, during California's intense heatwave in September 2022, Southern California Edison utilized a time-of-use rate that led to a significant reduction in energy consumption, measuring a 75-megawatt load drop as customers adjusted their usage in response to higher on-peak prices. This shift not only helped alleviate pressure on the grid but also allowed customers to save on their energy bills. Overall, this trend highlights the growing importance of time-varying rates in fostering consumer engagement and creating a more responsive energy market.

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