Energy consumption costs more at peak times

By Bill Bullock

[singlepic id=306 w=320 h=240 float=right]The electricity network, all the way from generation to a customer’s meter, is similar to a highway system. If roads are built to handle all traffic smoothly during the few hours per week of rush hour then they are significantly over-built for the rest of the time. Often, there is a compromise in road building where there are bottlenecks and delays at times, but vehicles eventually get where they are going.

In distributing electricity, such compromise is not a good option. A bottle neck at any point in the process, whether a lack of generation or too small of a wire or transformer on a pole, can result in an outage. For this reason, infrastructure is built to handle peak load conditions.

Peak load conditions on an electric grid in the southeast US typically occur on hot summer weekday afternoons, between about 4 and 8 pm. During this time many businesses are still open, many residents are returning to their homes, and energy intensive air conditioning load is the most significant contributor to setting the peak. Power demand during those few hours per week can be significantly higher than demand for the rest of the week. There must be enough generation plants on line to handle that load, and even the least efficient and most costly plants must be operated to meet electricity demand at the peak.

Most electric consumers in Memphis are not aware of this because there is no residential time differentiated electric metering. The electric meters currently used act like odometers. They accurately measure usage over time and a meter reader reads them once per month. Monthly bills merely take the kilowatt-hours used during the month and multiply that number by an average rate. During peak periods, this average rate does not cover the actual cost of generation. During off peak periods, the average rate exceeds the actual cost of generation.

The industry is quickly moving towards giving customers information and price signals to encourage moving load off the peak. If you know you are paying a lot for electricity during a few hours of operation during system peaks, you may change your habits. Perhaps you would delay starting a dishwasher or electric clothes dryer. You may switch your pool pump off during that time. Perhaps you would even pre-cool your house so your air conditioner compressor would not come on very long during that period.

Activities like that, done by many people, will lower the cost of electricity. Fewer generation plants would need to be built, reducing capital expenditures. Additionally, the most inefficient plants would be used less, lowering operating costs.

However, turning things on and off, delaying start times, and other strategies for moving load off peak can be tough to accomplish. What if you forget? What if you are not home? When are the peak times?

This is where the Smart Grid comes into play. Smart Grid is a combination of equipment, communications, and processes that utilities use to provide enhanced operations. Under the umbrella of Smart Grid are smart meters, switches, monitors, analysis software, distribution system automation, demand response and communications equipment between the utility and customers. The basic concept of Smart Grid is to add monitoring, analysis, and communication capabilities to the national electrical delivery system to maximize its capabilities while simultaneously helping consumers to reduce their energy consumption.

A traffic engineer could lower road building costs if he could get commuters on a staggered schedule so they are not all on the road at the same time. Likewise, a utility system operator could lower electrical costs by mandating when you can turn on appliances. Neither will occur, but on the electric side, the Smart Grid will be able to give customers knowledge and tools to shape their load and save energy and money if they choose. Many people making small adjustments can have significant impact.

For example, if every household in the Tennessee Valley was able to shed the equivalent of two 100 watt light bulbs at system peak, this would eliminate the need for a generation facility the size of the Allen Generating Plant in Memphis. That is significant!

In addition to reducing the costs associated with generating electricity, the Smart Grid would allow MLGW to reduce its operating expenses. Meter readers will become a thing of the past, reducing staff. Additionally, misread or estimated meters would be virtually eliminated, reducing the need to staff for issues caused by those circumstances. MLGW would immediately know when a house or business has suffered a power outage, reducing the need for troubleshooting. Utility theft, an issue larger than most realize, would be much easier to prevent and catch because when meters are removed, MLGW would know it immediately.

It will be a while before all of Memphis is on the Smart Grid. In the mean time, however, know that your personal choices have an impact not only on how much electricity you consume, but on the cost to generate and distribute that electricity as well.

Log on to and click on “Smart Grid” for answers to frequently asked questions and MLGW’s progress on this topic. Go to “In Home Evaluation Program” to learn of MLGW/TVA incentives for making energy improvements and investments. Look at “Energy Tax Incentives” to see how some of these improvements qualify for Federal Tax Credits. Use “My Account” to track your energy use, get energy conservation tips, view and pay your bill, or sign up for paperless billing.

Bill Bullock has been working in the energy field for over 25 years, and is a long-time resident of Midtown Memphis. If you have questions regarding this information or energy use in general, contact him at


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