Do you pay 'tiered rates' for you power?

[spidey07]

First off, try to keep P&N outta it please. I know it will be difficult to do so.

The concept of paying a unit price higher because of more purchasing is entirely foreign to me. It goes against every principle I've ever been exposed to in business and negotiation of the last 20 years. *WTF! You want to charge me MORE per unit the more I use? FU* If you use more of a service, buy more quantity, the unit price declines based on your commit level.

This behavior goes in direct opposition to supply/demand, unless one is controlled. My guess is the supply side is controlled.

 

[deadlyapp]

Power is definitely geared by demand, but the supply is fully controlled by dispatchers. The more people who kick up their power usage, the more powerplants have to produce. The transmission cost is also pretty ridiculous as no company owns all the lines.

Edit:
There are many different areas that charge by usage like this in different tiers. While most people seem accustomed to bulker the purchase, the less they should pay per unit, this isn't possible in almost all public utilities, as well as things like cell phone usage and so on and so forth.

 

[spidey07]

Power is definitely geared by demand, but the supply is fully controlled by dispatchers. The more people who kick up their power usage, the more powerplants have to produce. The transmission cost is also pretty ridiculous as no company owns all the lines.

Edit:
There are many different areas that charge by usage like this in different tiers. While most people seem accustomed to bulker the purchase, the less they should pay per unit, this isn't possible in almost all public utilities, as well as things like cell phone usage and so on and so forth.

What happened to economies of scale though? I'm viewing this with a telcom/networking background. Most always the more you use, the unit price goes down.

 

[IronWing]

Yep, tiered rates for power and water.

 

[lupi]

most of the stories i've read had people with those power monitoring boxes installed ended up paying more that they were with a basic cost per use monitoring.

 

[BoberFett]

There are different prices during winter and summer, but during those times it is not tiered. Our electric company is a relatively small cooperative in MN, 2009 revenues around $200M.

 

[deadlyapp]

What happened to economies of scale though? I'm viewing this with a telcom/networking background. Most always the more you use, the unit price goes down.

It has to do with power brokering - I don't know a whole lot about it but most utilities companies have to do it.

You have basically 4 major source of energy in the United States. Your standard coal/gas power plant, hydro, wind, and solar. Nuclear is also a factor, but most areas in the US don't get much from nukes. Power cannot be stored, it is provided in real time. You turn on a light in your house, the supply must in turn be increased. Utility companies that create their own power can provide a great price in most cases, especially if they're smaller, but the large companies (like PGE) have a huge area to supply and they draw from power plants in many other locations. Coupled with the high cost of transmission over long distances (think Washington to California), and them not wanting to upgrade infrastructure (so instead put artificial caps on the users), you get these tiers.

Think of it as a forced energy conservation.

 

[IronWing]

What happened to economies of scale though? I'm viewing this with a telcom/networking background. Most always the more you use, the unit price goes down.

Bulk discounts also exist in the electrical market but with a catch. If you are a large power user (think mine or irrigation district) you can get a price break but you have to agree that if there is a temporary supply shortage, you are the first user unplugged from the grid. Your consumption has to be a on a scale that will make a difference in the overall power supply balance to rate a discount. Home users can't get the deal because cutting off a single house won't help much in an undersupply situation. If your business can't handle a shutdown of power then you're not a good candidate for the discount.

 

[BoomerD]

http://www.youtube.com/watch?v=Foj9Z4I_PJ0

 

[rcpratt]

Energy production costs increase as demand increases. Nuke plants are always running because they're the cheapest. Then coal. Then natural gas (although this may be changing because of fracking...). If they don't have to run the natural gas or other plants (biomass, etc.), they won't. The last resort is buying power from other utilities. This is also a period where this country is beginning to reach its power capacity until new plants are built. They're encouraging us to conserve.

It has to do with power brokering - I don't know a whole lot about it but most utilities companies have to do it.

You have basically 4 major source of energy in the United States. Your standard coal/gas power plant, hydro, wind, and solar. Nuclear is also a factor, but most areas in the US don't get much from nukes. Power cannot be stored, it is provided in real time. You turn on a light in your house, the supply must in turn be increased. Utility companies that create their own power can provide a great price in most cases, especially if they're smaller, but the large companies (like PGE) have a huge area to supply and they draw from power plants in many other locations. Coupled with the high cost of transmission over long distances (think Washington to California), and them not wanting to upgrade infrastructure (so instead put artificial caps on the users), you get these tiers.

Think of it as a forced energy conservation.

Nuclear is >20&#37; in the US, and a very close 3rd behind natural gas. Hydro is ~7%, and all renewables combined are <4%. So you're a bit off. Nuclear is also the quintessential baseload plant - they're running as much as possible because they're the cheapest.

Sorry, ranting nuclear engineer that works for a utility

 

[spidey07]

Bulk discounts also exist in the electrical market but with a catch. If you are a large power user (think mine or irrigation district) you can get a price break but you have to agree that if there is a temporary supply shortage, you are the first user unplugged from the grid. Your consumption has to be a on a scale that will make a difference in the overall power supply balance to rate a discount. Home users can't get the deal because cutting off a single house won't help much in an undersupply situation. If your business can't handle a shutdown of power then you're not a good candidate for the discount.

I understand that and thanks for the thoughtful reply. I read the contracts and rate for my local electrical provider at the industrial and residential areas. There are no such supply shortages or possibilities of such in my area (KY) and the contracts reflect the "we got plenty, how much you want?" in the contracts and rates.

So it's my understanding the supply side and transmission in areas with penalizing usage are the problem. They are discouraging demand by limiting supply via unit cost.

 

[spidey07]

http://www.youtube.com/watch?v=Foj9Z4I_PJ0

Stop confusing people with math, dammit.

 

[spidey07]

WTF!!!

What states do you live in that such a price structure is even accepted?

 

[IronWing]

I understand that and thanks for the thoughtful reply. I read the contracts and rate for my local electrical provider at the industrial and residential areas. There are no such supply shortages or possibilities of such in my area (KY) and the contracts reflect the "we got plenty, how much you want?" in the contracts and rates.

So it's my understanding the supply side and transmission in areas with penalizing usage are the problem. They are discouraging demand by limiting supply via unit cost.

Kentucky is in a special position with some of the lowest rates in the nation. The combination of local coal, TVA, and highly efficient (yet incredibly dirty) dirt cheap, grandfatherd coal plants keep Kentucky's rates low. Also, when I lived there (10 years ago) the electric industry was still fully regulated preventing Kentucky utilities from selling to all buyers on the national grid at will. This regulation protects Kentucky users from national shortages and rate spikes. Kentucky also has a handful of enormous power users that can be cut back (as discussed above) if a local power shortage should develop. The Paducah Gaseous Diffusion Plant alone uses more electric power than the entire Louisville metro area (the plant uses about as much electricity as St Louis) and its power load can be cut back drastically almost instantaneously if a shortage develops.

 

[deadlyapp]

Energy production costs increase as demand increases. Nuke plants are always running because they're the cheapest. Then coal. Then natural gas (although this may be changing because of fracking...). If they don't have to run the natural gas or other plants (biomass, etc.), they won't. The last resort is buying power from other utilities. This is also a period where this country is beginning to reach its power capacity until new plants are built. They're encouraging us to conserve.

Nuclear is >20% in the US, and a very close 3rd behind natural gas. Hydro is ~7%, and all renewables combined are <4%. So you're a bit off. Nuclear is also the quintessential baseload plant - they're running as much as possible because they're the cheapest.

Sorry, ranting nuclear engineer that works for a utility

Lol, sorry, I'm westcoast where hydro is more prevalent from what I've seen.
What I see over here is that since wind and solar are not controllable for the most part, those get the priority over everything else, even though it may be more expensive - all things considered. After that is hydro/nuke/gas as the baseload (in Washington we get a ton of power from the BPA, so hydro is a pretty big base for us).

 

[JS80]

Yup, water and power is tiered. LA DWP.

 

[rcpratt]

Lol, sorry, I'm westcoast where hydro is more prevalent from what I've seen.
What I see over here is that since wind and solar are not controllable for the most part, those get the priority over everything else, even though it may be more expensive - all things considered. After that is hydro/nuke/gas as the baseload (in Washington we get a ton of power from the BPA, so hydro is a pretty big base for us).

Wind and solar are passive so yes, that would take priority over nuclear...but it's not guaranteed to be consistent. After that it's always nuclear. Not exactly sure where hydro fits in, but it's usually not enough capacity to matter much. And then coal or gas based mostly on gas prices.

 

[IronWing]

The order of turning on and off different supplies isn't based solely on price. It also depends on ramp up time needed to meet changing loads. Natural gas turbines have an almost instantaneous response. Nukes also have an instantaneous response but they are base load plants anyway so usually running near capacity. Solar and wind have no response capability. Hydro has a some response lag as does coal. A spike in demand may require the use of expensive natural gas even when cheaper sources aren't maxed out simply to avoid brownouts.

 

[iGas]

Around here we went from flat rate to tier rate 3 years ago and my bill jumps 35&#37; while the average home jumps 30%. Low and behold we recently got another rate increase of an additional 30% because of the freaking added carbon emission tax (and all our power came from hydro).

Prepare to bend over the barrel because there is no one else that you can buy electricity from.

 

[NL5]

As mentioned above, you are looking at things ass backwards. As demand goes up, power gets more expensive. It's that simple. They are just asking you to pay for the higher demand, instead of passing that cost onto your more energy efficient neighbors.
'

 

[TraumaRN]

Well luckily my city has it's own power plant. The city as a whole only use about 40-45&#37; of the power plant's capacity. The city sells the rest to our regional provider. The result? Flat rate price and only 0.0851 per kWh. Awesome.

 

[guyver01]

Tiered rates is the invention of the devil.

The first 500 kWh in the billing period are charged at the lower Tier 1 rate of 4.6 cents. Usage above 500 kWh in the billing period is charged at the higher Tier 2 rate of 9 cents.​

i hate xcel in colorado some times.

The only thing keeping me from being pissed... is i paid double under LIPA when i was back in NYC.

 

[Powermoloch]

Although tiered rates can be a bite in the ass, but power aint cheap when there's a demand.

So start being more power effecient to save money . It may sound silly for some folks, but it's cheap to provide less power.

 

[iGas]

Tiered rates is the invention of the devil.

The first 500 kWh in the billing period are charged at the lower Tier 1 rate of 4.6 cents. Usage above 500 kWh in the billing period is charged at the higher Tier 2 rate of 9 cents.​

i hate xcel in colorado some times.

The only thing keeping me from being pissed... is i paid double under LIPA when i was back in NYC.

I concur.

My billing is every 2 months but I break it down to monthly here:

Tier 1 ($0.0666/kWh): 0~675kWh

Tier 2 ($0.0932/kWh): >675kWh

+ basic charge
+ rider fee &#37;
+ energy fund levy (carbon emission tax) %
+ transit levy %
-----------------------------------------------------------
+ Harmonized Sale Tax %

 

[TraumaRN]

Tiered rates is the invention of the devil.

The first 500 kWh in the billing period are charged at the lower Tier 1 rate of 4.6 cents. Usage above 500 kWh in the billing period is charged at the higher Tier 2 rate of 9 cents.​

i hate xcel in colorado some times.

The only thing keeping me from being pissed... is i paid double under LIPA when i was back in NYC.

Jesus think your power company nickel and dimes you enough?? Sucks man.