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This question is probably better suited for another forum, and I'm thinking that it might be a ridiculous question, but I thought I would ask anyway. While we all see energy prices go up certain times of the day, where is the logic behind the price increase? Does it cost POCO's more to produce during these hours? Or, is it nothing more than a motivation to use less energy? Or something else???
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Have you ever heard the phrase "supply and demand"?
When there is more of a demand during the daytime the POCO has to ramp up the generating systems to supply what is needed. That costs them more in fuel and equipment maintenance costs which is then passed down to the customers.
At night when the demand is much lower the cost to generate is also much lower so the cost to purchase electricity is lower to the customers.
Does that clear things up for you? -
Yes. Baseline plants are run at full capacity (more fuel + maintenance costs) and they start up peakers (MUCH higher cost.) Since real time pricing is not implemented in most places yet, they have to decide several years ahead of time what their power prices will be, so they make some guesses. Part of the pricing is indeed intended to discourage peak power usage; that is calculated into the cost.
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Hey SunEagle, have you ever heard of a religious guy named John Paul?
While I appreciate your response, I suppose I could do without your pathetic attempt at sarcasm. In my post I stated it may be a "ridiculous" question. If that is how you answer all questions, I truly sympathize for your children. How's that for clarity!
Texts rarely show inflection. So if you were not attempting to be sarcastic, I apologize. But, please keep in mind this pointComment
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You seem to be carrying a chip on your shoulder. Cool down, brother.
To answer your question, a power generator makes maximum money(profit) when they are running 24 hrs a day at their peak capacity. When demand varies through the day, you still need to supply the peak demand during the day. That means the power producer is not making money the rest of the time. So, utilties try to curb that demand by introducing carrots(incentive) and stick(penalties) policies.Last edited by PenguinManna; 09-16-2016, 04:07 PM.
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Jflorey2,
Thank you for an informed response. I am sure we all appreciate itComment
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No problem. I wasn't trying to be sarcastic but I some times come across that way when I state what I feel is the obvious but I forget most people are not in the electrical power industry and do not understand what it takes to generate power or how much it costs to run a plant.
My children by the way (all close to or older than 30) know how I speak and can handle my sarcasm.
Sorry, if I bent your nose out of shape.
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With no sarcasm intended (well, maybe a little), it may be better for the OP's feathers that were not ruffled that Suneagle responded before S.K. huh ?
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It is a Failure of your state Energy Policy plain and simple. You live in a State that refuses to build Power Generation, and now have to rely on Imports from neighboring states to meet your demand. This forces your utility to buy power on the open Market sold to the highest bidder. They punish you with artificially inflated rates and schemes. So during peak hours your state is importing a large portion of their power bought on the Market. Both your state utility and neighboring state utility split the bounty up.
Many many states pay less than 10-cents per Kwh for the first 2500 Kwh in a month. Over 2500 Kwh in a month and the price falls drastically. Like any other commodity, the more you buy, the less expensive it is. But not in your state. Pure and Simple State Energy Policy. Now the scary part is neighboring states will not be able to meet your growing demand in the future. They will cut you off.Last edited by Sunking; 09-15-2016, 07:44 PM.MSEE, PEComment
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Pricing of power is very complicated. There are generating costs, generating limitations, transmission costs, transmission limitations, and consumption and generation variations depending on the weather and day of the week.
I'm not sure where you live, but here in the northeast, you can get an idea about these complexities by checking out this link to the ISO New England website at various times of the day when consumption, and thus by necessity, generation, varies. Might have to wait a while before the link appears since the forum admins typically vet links before they become visible:
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Yes, we are all good here. It's good to see that this forum displays civility. That being said, it looks like my question wasn't as ridiculous as I thought as I have read a variety of insightful answers.
I suppose I should have included that I am in Northern California (east of Sacramento) and therefore am being held hostage by PG&E
Thanks to all for responding,
Steve CComment
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