Dynamic Pricing Fundamental to a Smarter Grid

Apparently, we lose $10 billion annually because of how our electric utility prices are structured. According to Ahmad Faruqui’s research, the electric utility industry has been too slow to trash static pricing models. Under a static pricing model, the utility determines what the price will be before observing demand and other factors. Faruqui argues that dynamic pricing models, which can be structured a number of different ways, will promote rate equity, protect lower-income customers, accelerate the proliferation of electric vehicles, and increase use of renewable energy resources. See? We can use market principles to achieve progressive results!

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