Beneficial electrification and electricity usage, By Loren Howard
Beneficial electrification has become a pervasive phase in recent years, but what does it mean? There is a belief that converting products that currently use oil or gas to electricity is a good thing for the environment and possibly for the pocketbook. While that has potential, it is hard to accept that it is as simple as that.
The most obvious electrification effort is that of vehicles. Once an electric vehicle is produced, the cost to operate that vehicle is typically half the cost of a gas or diesel engine vehicle, but what about the cost to produce that vehicle? In addition, how reliable is the supply chain of the materials needed to produce that vehicle? In the past year, buying a new vehicle is not an easy proposition. The supply chain of integrated circuits, the electronics, has been substantially interrupted. The discussion and answers to these questions is way beyond the space available in this monthly column, but each of us should investigate and consider.
The conversation of beneficial electrification goes far beyond just vehicles, it includes how homes and businesses are heated, how meals are cooked and how you mow the lawn. With all this new effort to use electricity to power our lives rather than oil or gasoline, what will be the impact on the electric industry and closer to home – REC?
REC has in recent years begun the transition to rate structures that ensure that equitable pricing of rates exists for all members of REC. One of those changes is the transition to time-of-use rates. Time-of-use rates adjust the variable costs of electricity based on the time of use. Factoring all the costs of producing electricity, it is generally less expensive to produce and deliver during non-peak usage times when compared to peak usage time. REC’s peak usage is almost always in the late afternoon or early evening hours. Beginning on April 1, 2022, i.e. this year, REC’s on-peak period will be from 5 p.m. to 10 p.m., seven days a week. All other hours will be off-peak. Rate designs that encourage using power during the off-peak period will help reduce demand charges from REC’s wholesale power provider which in turn reduces REC’s overall power costs. Members who can structure their electric usage to use more off-peak electricity can save on their power bill.