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Trend: fixed energy bill

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Trend: fixed energy bill

The residential monthly billing model has existed for many decades in exactly the same way! It is calculated by multiplying the tariff by the volume of energy consumed.

A very creative initiative is emerging! Fixed monthly bill. It's like when we contract NETFLIX! For a fixed price we see every month as many films as we want.

Where's the catch? By contracting a fixed monthly account, the customer agrees to join programs that offer a valuable benefit to the concessionaire but that do not interfere with his/hers life.

An interesting aspect of this deal is that it will be the provider of this new model that "will make it happen" along with the customer.

A whole new world is emerging!

Rafael Herzberg's picture

Thank Rafael for the Post!

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Matt Chester's picture
Matt Chester on Jul 9, 2020 12:13 pm GMT

The benefit of this to a customer is evident-- reliability in what their bill will be, and they won't be dinged for high usage months (though they may pay on average more per month for this right). And I suppose if on average customers end up paying more then that's the advantage to utilities-- but what of the risk that demand goes up greatly because people will use energy more without concern about the impact to their monthly bill? Is that effect of accountability to energy waste not as great as one might think it is?

Rafael Herzberg's picture
Rafael Herzberg on Jul 9, 2020 4:55 pm GMT

The concept I have in mind is: energy users will pay per kW demand (integrated in 15-min intervals). It is a "neutral" system because if there is a lot of usage the demand raises and accordingly the customer will pay more.

Customers would be stimulated to increase their load factor because this would mean a lower bill. Accordingly the drive to go for DR programs, load control taking into account the shape of the customer's energy usage profile, etc.,etc.

Customers would try as much a they could to "flatten" their load shapes. This is a huge advantage for the supply side and also for the energy user that would pay a lower bill.

As we all know the most important driver in the power business is capital amortization ofthe supply side.  

Waste would be highly considered. A lot of waste would mean a higher demand and accordingly a higher bill. 

Rafael Herzberg's picture
Rafael Herzberg on Jul 9, 2020 5:35 pm GMT

Matt, let's compare these 2 options for water heating using electricity:

1st) a 9.5 kW electric tankless water heater and
2nd) a 1.5 kW electric conventional boiler with an associated tank. 

Both require basically the same amount of input energy to produce hot water.

So, for a residential energy user it will not make a meaningfull difference - given the ongoing rate structure. Both heaters will draw the same kWh/month.

But.... for the supply side it makes a huge difference if it is about meeting a 1.5 kW load or a 9.5 kW one. 

What happen in real life is: the guy who installs a 1.5 kW water heater ends up subsidizing the guys who installs a 9.5 kW one.

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