Posted by: nialljmcshane | October 3, 2010

The Impact of Real Time Pricing in Chicago

It has been a few weeks since I last posted to this blog.  That is largely due to the fact that I recently secured full time employment again and so I have had many other commitments.  My new job is not in the Smart Grid or energy field but there is a green technology angle to it.  I am working at a VC funded technology firm in Chicago called Cleversafe (  Cleversafe has developed a new data storage technology based on information dispersal algorithms that offers the promise of increased availability and reliability of data storage with lower overall cost.  In comparison to RAID 6 storage with replication, Cleversafe’s technology can reduce the amount of physical storage capacity required by up to 60% and, as a result, cut costs for power and cooling by that amount too.

In this column, I want to return to the subject of real time pricing in Chicago which I have discussed in a couple of earlier columns.  A colleague from the Green Technology Organization of Greater Chicago has recently switched over to real time pricing offered by Commonwealth Edison and, in anticipation of that event, he has been collecting data on the real time pricing rates over a period of almost 3 months from July through September.  The data represent 55 days during that period and, although some days’ data sets are incomplete, it presents a pretty good picture of the real time rates during a period that included some very hot weather and some relatively mild weather.  Daily peak prices ranged from less than 3c/KWh to over 23c/KWh.  Daily averages ranged from around 3c/KWh to 8c/KWh.  The standard fixed rate offered by ComEd is 7c/KWh.

To fully appreciate the impact of these rates, it is necessary to consider them in the context of an actual usage profile.  To do this, I created three hypothetical profiles as follows:

  • A standard profile representing a fairly typical household in which usage peaks in the morning as people get up to go to work or school and again in the early afternoon through the evening hours when people return home.
  • A profile representing a homebound person in which usage remains relatively constant all day.
  • A peak shifted profile representing a modest amount of demand being shifted out of peak hours into the nighttime hours when rates are lower.

All three profiles aggregate to a daily usage of 35 KWh which is consistent with the average residential electric bill of around 1,000 KWh per month.

Using these three profiles, I then modeled the actual cost based on the fixed rate of 7c/KWh, a sample day from the period where energy rates remained very low, a sample day where energy rates peaked very high and an average of the real time pricing across all 55 samples in the dataset.  The table below illustrates the results of this analysis.  With no peak shifting, a typical consumer can reduce their average monthly energy costs by 34%.  With demand response, the reduction can be increased to 43%.  Interestingly, the incremental savings from shifting peak demand are not all that significant and this seems to bear out the concerns that many observers have raised about the value of demand response programs for residential consumers.  However, the other interesting thing to note here is that even for those whose usage profiles remain relatively constant throughout the day, such as the homebound or the elderly, there appears to be a significant cost saving associated with moving to the real time rate.

Model Daily Cost Monthly Cost Saving
Standard Fixed Rate $2.45 $73.5
Standard Low Cost $1.16
Standard High Cost $2.92
Standard Average $1.61 $48.37 34%
Stay at Home Fixed Rate $2.45 $73.50
Stay at Home Low Cost $1.21
Stay at Home High Cost $3.17
Stay at Home Average $1.63 $48.94 33%
Peak Shifted Fixed Rate $2.45 $73.50
Peak Shifted Low Cost $1.02
Peak Shifted High Cost $2.37
Peak Shifted Average $1.40 $42.02 43%

Note however that this analysis only looks at the actual energy charges.  I have looked on the ComEd site for comparative details of the various charges that are added to the bill on each of these rate plans and I have not been able to find any data on this.  I believe there is an additional charge for the smart meter that is required to enable real time billing.  This charge would reclaim some of the cost savings associated with the real time rates.  There may well be other charges that reclaim even more of those savings.  I will provide an update on this analysis once I can find the additional data on the non-usage related charges.



  1. Hi Niall,

    I recently moved back to Chicago and signed up for the real time pricing as well. From all the data (available on the ComEd website) it seems it is going to be a cost saver and I am looking forward to my first bill.

    Regarding the additional charge for the smart meter it is $2.25 / month. Also, it should be mentioned that enrolling in the real time pricing program requires that one should remain to on the program for 12 consecutive billing periods.

    There are also some changes that we try to do e.g. run the dishwasher always in the night (by setting the 2 or 4 hour delay start). I wish the washer and dryers had the same mechanism i.e. the washer starts after 2 or 4 hours and when it is done it automatically dumps the clothes into the dryer 🙂 I hate to stay up late just to do that 🙂

    Anyways it was nice reading your blog. Will look forward to your next posting on this.

    Best Regards,

    • Imtiaz. Glad to hear you are back in Chicago.

      Over twenty years ago, in London, we had a two tier pricing program that offered lower cost electricity overnight. We had a combined washer dryer and by adding a simple timer switch to the mains outlet we were able to program that to run overnight.

  2. Very interesting. Your projections seem higher than experienced by others in different environments. It will be interesting to see if over time utility commissions and the utility companies will support this level of revenue reductions without some back door way of recovering their lost revenues.

    • Thanks Chuck. There is very limited penetration of real time metering in the Chicago market to date. I suspect that there is no way that ComEd will continue to price the real time rates this low. However, I have also heard that they are slow rolling this program and customers have to be really persistent to get onto the real time rate so maybe that is a strategy to address the fact that they know they have a problem with these rates.

  3. Congras on your new position. According to Edison recent rate filing current residential rate deliverycharges fo single family homes (w/o electric space heat and excluding taxes) are as follows:
    Customer Chares: $7.64
    Standard Metering Service Charge: $2.24
    Distribution Facilities charge (kWh): $0.02407

    The proposed rates are after a thre year phase in:
    Customer Chares: $26.78
    Standard Metering Service Charge: $3.20
    Distribution Facilities charge (kWh): $0.00798
    Illinois Electricity Distribution tax (kWh): $0.00126

    Residential real time pricing cost recovery charge goes from $0.14 to $0.05.

    Meter Lease fee for RTTP is $4.06 reduced to $225

    Hope that helps.

  4. […] Guide for details of the various additional charges that were missing from my analysis of the Impact of Real Time Pricing in Chicago.  This document provides a sample bill for a consumer on the real time tariff and it makes for […]

  5. I have been in the program for over a year and last year we saved $200 on our electric bill. It’s not dramatic but it was a savings. We delayed started our dish washer, I staggered the pool pump to run 4 hours in the morining then 4 hours in the evening instead of all day for 8 hours and did laundry off hours an weekends. During the day the air conditioning temperature was turn up. Doing the laundry late at night or early morning would provide more savings but that isn’t an easy task with two units and a washer without a delayed start. I know I could put a time on the washer but the idea of a putting load in the dryer when you get up didn’t appeal to the wife. I think its doable if you do one load each night timed so it’s done when you get up, put it in the dryer and it should be done before you leave in the morning.

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