Power Smart Pricing - A Smart Electricity Rate from Ameren Illinois

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Illinois Households Cut Electricity Bills with Power Smart Pricing

January 20, 2011

Nearly 11,000 downstate Illinois households have discovered they can cut their electric utility bills by switching to the Ameren Illinois Power Smart Pricing program.

“Power Smart Pricing is saving Ameren Illinois residential customers an average of 16 percent or $200 on their annual electricity bills,” said Stephanie Folk, communications manager for CNT Energy, the non-profit coordinator of Power Smart Pricing.

“Because Power Smart Pricing works, it now has the highest enrollment rate of any such program in the United States. With Power Smart Pricing, customers can use electricity when the price is low.”

Power Smart Pricing is designed to help customers save money by giving them access to hourly, market-based electricity prices. While these prices vary, often the market-based price of electricity is lower than the price under the standard residential rate. Customers can increase their savings by taking simple actions to conserve energy during the hours when prices rise.

“For example, customers are saving money by doing laundry and running the dishwasher at night, in the morning or on weekends when electricity prices are low,” Folk said. “Customers have discovered that simple changes in household activities can result in big savings.”

How it works

  • In contrast to the basic summer and winter rate customers typically pay for electric supply, real-time pricing allows customers to pay a fluctuating hourly price for electricity – a price driven by the market demand for energy.
  • Power Smart Pricing participants have access to price forecasts that can be used to guide their energy use, and potentially save them money.
  • CNT Energy will alert Power Smart Pricing participants in advance by e-mail or phone any time the price of electricity is expected to be high.
  • Customers will be required to remain on Power Smart Pricing for 12 months before they may switch to another supply option.
  • Customers will continue to receive their electric bill from their Ameren Illinois utility

Power Smart Pricing has also garnered support of the utility watchdog group, the Citizens Utility Board (CUB). CUB Executive Director David Kolata says the program is a good option for many customers.

“If we’re going to find answers to our energy problems, we have to offer Illinois families a wide spectrum of creative programs that allow them to cut energy waste and save money. Power Smart Pricing is one of those good, sensible ideas. It’s been saving households $200 a year, and that’s good news in this economy,” said Kolata.

In addition to helping customers cut costs, Power Smart Pricing has demonstrated that participants reduce their peak demand for electricity. This eases stress on the electric grid, and can help reduce the cost of power for all customers by reducing the amount of expensive peak power that the utility must buy.

More details about the Power Smart Pricing appear below. For more information, call 877- 655-6028.

About Power Smart Pricing

Background

Energy efficiency advocates and leading economists have long recognized that residential electricity rates that reflect the actual market cost of electricity are essential to ensuring consumer benefits from a nationwide expansion of the smart grid. Market-based rates allow customers to adopt more energy efficient behaviors, and provide consumers with tools to save money by using cheaper, off-peak power.

A pilot program run by ComEd and CNT Energy from 2003 through 2006 demonstrated that offering an hourly pricing option has several benefits. It increases customer choice, gives customers tools for managing their electricity costs, encourages more energy efficient behavior, and helps to reduce electricity demand during peak hours. Based on the success of this pilot program, in 2006 the Illinois state legislature passed a law requiring major electric utilities to offer residential customers an hourly pricing option. Ameren Illinois then worked with CNT Energy to launch Power Smart Pricing in early 2007. Since then the program has grown rapidly, with enrollment more than doubling during 2010 to reach its current level of nearly 11,000 active participants.

How it Works

Power Smart Pricing gives customers access to hourly, market-based electricity rates. This allows customers to manage their costs by shifting some of their electricity use to off-peak times such as nights and weekends. In addition, hourly electricity prices often stay low all day during the fall, winter and spring. Participants who enroll remain Ameren Illinois customers. As the program administrator, CNT Energy promotes the program and provides specialized customer support including information on price patterns, newsletters, a specialized call center, and e-mail and phone alerts in advance of higher prices.

Results

Power Smart Participant have saved money, reduced their electricity usage during peak hours, and reduced their total electricity consumption. Results from the first four years of the program include the following.

Participation Levels

  • Enrollment more than doubled during 2010. Nearly 11,000 households are currently enrolled.
  • Municipalities with the highest enrollment levels are Champaign (840), Decatur (744), Belleville (661), Peoria (583), Urbana (409), Bloomington (315), Quincy (286), Collinsville (264), Danville (257), and O’Fallon (245).

Bill Savings

  • Participants have saved an average of 16 percent compared with the standard residential rate.
  • Percentage saved is similar for all income levels, from households earning less than $10,000 per year to those earning $150,000 or more.
  • Together, participants have saved more than $3 million since the program started.
  • Typical customers with bills averaging $100 per month have saved nearly $200 per year on electricity.

Customer Satisfaction

  • More than 99 percent of customers stay with the program after their initial 12-month commitment expires.
  • The majority of customers say participating is quick and easy.

Electricity Usage

  • During 2009, participants reduced their electricity usage 5.1% during the summer and 1.2 percent overall.
  • Participants reduced electricity usage between noon and 5 p.m. on summer weekdays, times when prices and demand tend to be highest (average load reduction of 0.13 kW per hour during 2009).
  • Participants reduced electricity use by an average of nearly 25 percent during peak hours after they received a high-price alert by phone or e-mail, notifying them in advance of higher prices.

For more information, go to www.powersmartpricing.org or call (877) 655-6028. Program evaluations from previous years are available at www.cntenergy.org/publications.