For almost 100 years we have paid for infrastructure capacity by using a volumetric tariff, based on KWH as an alternative for a demand tariff.
It started because our instruments could not accurately gather KW information and hold it until retrieved. This changed with digital meters.
Demand based tariffs are far more equitable than volumetric tariffs are for the infrastructure portion of the tariff. Bi-directional demand tariffs will cause people to think about when they use power and whether to install storage.
It will actually flatten the peak and increase the number of hours the infrastructure is closer to full, by shifting load.
Expect infrastructure to last longer and NWAs to last longer too as the move is made to electrification.
Downside? Bills end up more volatile, with each high demand period rising bills by more than a couple of extra KWH would.
What say you all?
Doug Houseman
Expert Member
Top Contributor
Time to make a change to electricity tariffs?
8 replies