No peaking! “DTE Energy is moving to a time-of-day rate plan in March, which means electricity costs more or less depending on when you’re using it.” What to know about DTE Energy’s new time of day rate (clickondetroit.com)
That’s Detroit Edison. Outstate, in the Consumers Power area, it’s more. “Consumers Energy’s 1.6 million residential electricity customers began paying 50% more during peak afternoon hours this week in an effort to reduce energy generation in the future.” Detroit News. Consumers Energy electricity rate increases 50% during peak hours (detroitnews.com)
What does it mean? Simple: you’re going to pay a higher bill for using power during different times of the day. Meet the term “peak energy.” “Peak Hours” are 3 PM through 7PM, on weekdays.That’s when the demand for electricity is highest. So why charge more for power during that time? Simple: to encourage you to use less electricity during those hours.
Why? DTE says it’s mostly during the summer. “When an excessive demand for energy occurs — usually due to extreme temperatures — it can affect energy delivery for everyone in our area. We’re committed to doing our part to ensure that the energy grid operates efficiently and reliably.” Peak Energy | DTE Energy
Okay. Energy use will now be variably priced. Customers are currently paying between 16.9 cents and 18.6 cents per kilowatt hour all day, every day. With the new plan, customers will pay 15.45 cents per kilowatt hour during off-peak hours. DTE talks about “extreme temperatures,” but the pricing structure goes into effect this March, 2023.
Why? To incentivize us to spread out energy use from concentrated hours. To keep the grid balanced. “And then what we’re trying to reflect from 3 p.m. to 7 p.m. is the most expensive time to generate power,” DTE President and CEO Trevor Lauer told Local 4.” What to know about DTE Energy’s new time of day rate (clickondetroit.com)
Question: why is it more expensive to generate power between 3 PM and 7 PM? Actually, it isn’t. Not inherently. Generation costs don’t magically drop two hours to cocktail time. But the costs do go up because the demand goes up and power companies aren’t set to provide maximum electricity at all hours. Example is a guy with a garden: every now and again he wants to roto-till the soil. But it doesn’t make economic sense for him to buy an expensive roto-tiller to only use every two or three years. So, what does he do? He rents a roto-tiller when he needs one.
Same deal for power utilities. They could build power plants to meet the peak hours, but that means they’ll have unused capacity most of the time. What they do is have capacity for the average demand, called “Baseline Power.” But weather conditions, severe temperatures, can make that Baseline shoot up fast. For the extra demand, they purchase energy from another source, which does get expensive. Also, they can’t always know what these conditions will be specifically, in advance, so they have to buy on a short time frame which costs more money.
The cost of generating power doesn’t go up, but individual company’s cost does.
QUESTION: why now? We’ve had greater peak power demand for years. Once in a great while we’d have a heat wave and a couple of days to reduce peaks, but nothing requiring year round price changes to encourage us to permanently change our electricity habits. What’s changed?
“Time-of-use rates have been used to help facilitate renewable energy integration into the grid in other states, said Greg Keoleian, director for the Center for Sustainable Systems at the University of Michigan.” Detroit News Consumers Energy electricity rate increases 50% during peak hours (detroitnews.com)
In other words, the goal is converting power production to renewables. Period. This isn’t any big secret, the utilities have been bragging about it for years. Michigan law mandated power companies to generate 10% of output from renewables by 2015. They are currently in compliance. Remember, power utilities are heavily regulated and supervised by the state. They do as they’re told. When the government says: “decarbonize” they say “yes, sir! …and this is what we need to charge to stay solvent.”
The problem is that renewables: wind and solar, are more expensive and less reliable. We can look to the experience of Germany, which went all-in on renewables, only to have to fallback to coal almost immediately during this less-than-severe 2023 winter. We can look at Texas during 2022’s big blackout, when severe cold combined with no wind. The environmentalists say renewables are the future, but they sure aren’t the present.
Face it: what Michigan’s utilities are doing is energy rationing. In a capitalist society, it’s done by price. But once again, why? Answer is: they don’t have the capacity to meet peak demand any more.
Why do we now have power rationing? Because utilities can’t meet peak demand,
Why? Because they’ve invested in a form of power generation that’s less reliable.
Why? Because the government made them.
Why? To save the planet—which is Green ideology.
SO: to satisfy environmental true believers, we’ve converted our basic power supply to technology untried on this scale, that’s proven to be inadequate. The response: ration what used to be freely and cheaply available. But hey! There’ll be government subsidies to ease the pain.
Sounds ridiculous! It’s like someone thinking you’re stupid enough to buy a car that’s way more expensive, way less reliable, just because they say it’ll save the planet.