Last June, Power Smart Pricing switched from using real time pricing to day ahead pricing. We were very happy with this change because it gave our customers an assurance of the actual price of electricity. Real time pricing can be quite volatile, and it is not uncommon for an occasional hour to show a price that is very atypical.
Yesterday (May 14th) was a great example of this difference. The day featured all the good and bad that real time pricing provides while the day ahead prices were very consistent with the low prices that we have seen over the past few months.
First the good - Between 1am and 3am, Ameren would have literally paid you for using electricity as the real time prices were negative (-0.000890 and -0.075410). Of course this occurred in real time so only those fortunate people who happened to have been running a significant amount of electricity at the time would have benefited.
Now the bad - During the 8pm hour, the price made an unpredictable jump to about 29 cents per kwh. This is roughly 5 times the flat rate, and it far outpaces the day ahead price of 3.8 cents per kwh. Day ahead pricing would never see a jump like this one, and it will never stray from the published price the evening before.
Real time pricing can also show times when the price is lower than the day ahead price which would always be nice to see, but there are certain instances like the price spike that occurred last night that can really cost a consumer money. Day ahead pricing provides the consistent pattern that can be used to ensure that shifting your usage to lower priced times will payoff.
May 15, 2009
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2 comments:
I am concerned about the impact that "Cap and Trade" legislation will have on energy prices. Will those on Power Smart Pricing be as protected to rate increases as another who is on standard pricing?
The short answer is yes. The prices that Power Smart Pricing customers get charged for their electricity are the same ones that set the flat rate every 6 months. The difference is that Power Smart Pricing customers would see the change as they happen on the wholesale market while a change to the flat rate would lag behind it.
The "Cap and Trade" legislation has a long way to go before it is finalized so it is hard to tell how it will ultimately affect Illinois electricity customers. However, you can be sure that changes won't be seen in the next 12 months. You could sign up for PSP now and stay on the program for the minimum requirement before there are any major changes to consider.
Ultimately the price for electricity on both the standard rate and PSP come from the same source. The difference is how it gets charged out to your account. So any affect Cap and Trade has on Illinois electricity pricing would be the same for both rate options.
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