TXU is First to Offer Free Night-Time Electricity Rate Plan

May 18th, 2012 by Susan Kraemer

TXU Energy in Texas is offering the first free energy rates in the nation, between 10 PM and 6 AM. Its daytime rates are 11 cents.

Wind power tends to be greatest in the wee hours. Texas wind power sometimes has to be curtailed or wasted because there’s no one to use it at night. The more wind power on the grid the more this happens, as it already has in Texas, and in the Pacific Northwest.

All electricity must be used right away, as generated, or generators must be turned off, or curtailed. Grid storage is being considered by utilities, to try to move the time of wind’s energy to the time customers need it – by day.

But rather than move the energy to the day, TXU Energy is trying to move the customers into the wee hours of the night. And with so much automation – it could be a huge advantage for Texas customers, where the smart grid is enabled so that consumers could take advantage of free night time power.

Delay timers on dish washers and clothes washers is one thing. The utility estimates that if customers can shift just 10 percent of electricity use from doing laundry or running the dishwasher, they can save about $200 per year, or just a few bucks a month.

But why stop at that. Buy an electric car and you’d have free night time energy to power it. That would mean driving with no cost at all for fuel.

Fill up a Steffes type of thermal storage electric heat sink at night, and release that heat as needed next day. That would mean home heating with no cost at all for fuel.

North Dakota-based Steffes manufactures in Minnesota, and has been shipping their thermal storage units for 25 years.

Their thermal energy storage units are programmed to use power at off peak hours to heat up electric coils surrounded by ceramic bricks in a sealed unit, that can store that heat for about 24 hours, and release it on demand for home heating. They also have units that heat hot water.

They have a thriving business in the surrounding cold and windy states, that have incentives to use night time wind power. Consumers in these states pay about 4 cents a kilowatt hour in off peak night time whereas daytime use is around 10 cents a kilowatt hour.

I called them to see what they thought of the TXU rates. Free is actually a very good deal for utilities, according to Jim Deichert at Steffes.

“There are hours during the night when there’s more supply than there is demand, and a utility has just a few options,” Deichert told me. “One option is to make that energy very attractive, as TXU has done, but in some areas in some cases they actually have to pay somebody to take that energy and so selling that for free is certainly better than having to pay somebody to take it”

The other option is for wind to be curtailed, but this gets “mucky” as Deichert puts it, referring to the legal actions that have ensued between wind developers and state power authorities. This is why the Obama administration FERC has been providing incentives to create more distributed storage.

Distributed energy storage can be deployed both by residential ratepayers, and by commercial sites like hospitals, hotels, commercial and industrial users, as California’s hospitality industry now does.

“This is a rate plan that has a lot of carrot attached to it,” says Jennifer Pulliam, director of product innovation at TXU Energy. “What we’re trying to do is create sustainable customer behavior.”

As I wrote in 2010 about thermal energy storage, this kind of consumer controlled distributed storage is the next step. With the first utility to provide the incentive for it in the form of free power for energy storage by individuals, it could be that Texas leads us there.

And if Texas ratepayers have less need than Minnesotans for heat, they could store their free power in an Ice Energy unit to freeze ice at night, and use it by day for free air conditioning. (Make Ice at Night to Store Wind Energy)









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