The Smart Grid: Why Getting Dynamic Pricing Right Is More Important Now Than Ever

The recent announcement of billions of dollars of federal funding for smart grid demonstration projects is of particular interest to people who have been involved in thinking about how modernizing the electric grid can bring new benefits to consumers. Many projects awarded have a dynamic pricing option that gives customers access to an electric rate that varies across each day, and provides incentives to manage peak electric demand; and some projects feature a real-time pricing model based on the wholesale electricity market prices. For these projects to truly benefit consumers, it is essential to think about dynamic pricing from the consumer’s point of view.