JEA Board Approves Demand-Based Pricing Pilot Program

Mar 26, 2019

Jacksonville’s public utility is rolling out a demand-based pricing pilot program this summer in an effort to reduce the load on the electric grid.

JEA’s board Tuesday unanimously approved the plan. The 5000-randomly selected residential customers will be enrolled in what’s called Flex Pricing, which means their monthly bills will rise if their peak electric usage occurs when the load is heaviest on the electric grid.

The flip side is the group could also save money, depending on the timing of their heaviest electric usage.

They will be able to opt-out if they choose to.

Kerri Stewart, VP and Chief Customer Officer, said the program is intended to change the way customers use their appliances.

“If a customer gets up in the morning and they turn on their washer and the water heater comes on and they turn on their oven, their pool, their pump goes off, we’re going to encourage all of our customers to spread out their usage and not stack their appliances,”    

Customers currently pay based on how much energy they consume, not on the demand they place on the grid at any given time. But the yearlong pilot will take that into consideration.  

“When they stack appliances, it puts a toll on our grid from a demand perspective,” said Stewart. “So it behooves all of our customers to ultimately spread out the way they use their appliances.”

The pilot will offer two rate options: one based on the two highest hours of electric usage called Dual Flex Pricing or Daily Flex Pricing, which is based on the customers’ average daily peak. Stewart said enrollees could see their bills go up or down depending on when they use electricity.

Peak Electric Usage Time Periods

  • April - October (summer): Monday - Friday, 12 p.m. - 7 p.m.
  • November - March (winter): Monday - Friday, 6 a.m. - 9 p.m.

Weekends and holidays are excluded from Dual Flex Peak Hours but are included in the Daily Flex.

“The goal is after that first bill comes out if the bill does go up, to help educate customers on what caused that in terms of their behavior and how they stack their appliances and how they use the system,” she said.

The pilot is part of a five year effort that builds on a smaller two year program. In 2017, JEA experimented with a similar 150 person opt-in program called Smart Savings, which based those customers’ rates on the two highest 15 minutes of electric usage.

According to the board, takeaways from that program included findings that demand pricing is more stable for the grid than traditional pricing and customers perceived it to be fairer. The board said customers also appreciated that the program made it easier to save and believed the technology helped them manage their usage more effectively.

Stewart said JEA could adopt the Flex Pricing plan if the enrollees are as pleased with it as they were with Smart Savings.

“Ultimately, the goal is large scale customer behavior change that takes a load off of our grid,” she said. “And that ultimately would lower our cost to produce and then eventually the cost to the customers.”

Flex Pricing enrollees will be notified next month with the program set to start in June.