System for developing real time economic incentives to encourage efficient use of the resources of a regulated electric utility

• US 5,237,507 A
• Filed: 12/21/1990
• Issued: 08/17/1993
• Est. Priority Date: 12/21/1990
• Status: Expired due to Fees

• Current Assignee: Norman E. Chasek
• Original Assignee: Norman E. Chasek
• Inventors: Chasek, Norman E.
• Primary Examiner(s): Cosimano, Edward R.
• Application Number:
  US07/633,070
• Time in Patent Office: 970 Days
• Field of Search: 324/116, 324/142, 340/870.02, 340/870.03, 364/464.01, 364/464.04, 364/483
• US Class Current: 705/412
• CPC Class Codes: G06Q 30/02 Marketing; Price estimation or determination; Fundraising
• CPC Class Codes: G06Q 30/04 Billing or invoicing
• CPC Class Codes: G06Q 50/06 Energy or water supply
• CPC Class Codes: H02J 13/00018 using phone lines
• CPC Class Codes: H02J 3/008 involving trading of energy or energy transmission rights
• CPC Class Codes: Y02B 90/20 Smart grids as enabling technology in buildings sector smart grids supporting the management or operation of end-user stationary applications in general, or like technologies with no associated climate change mitigation effect Y04S20/00
• CPC Class Codes: Y04S 40/124 using wired telecommunication networks or data transmission busses
• CPC Class Codes: Y04S 50/10 Energy trading, including energy flowing from end-user application to grid
• CPC Class Codes: Y04S 50/12 Billing, invoicing, buying or selling transactions or other related activities, e.g. cost or usage evaluation
• CPC Class Codes: Y04S 50/14 Marketing, i.e. market research and analysis, surveying, promotions, advertising, buyer profiling, customer management or rewards

Abstract

The electric utility industry is inexorably being forced into a less regulated, more competitive, and more conservation oriented mode of operation. It is therefore inevitable that electric energy will have to increasingly resemble a commodity that is bought and sold on free and competitive markets. This invention describes a system and method to emulate and automate such treatment of electric energy with minimal disruption to the public service oriented utility concept. The system for achieving this is comprised of; sensors that monitor 1) out-of-doors temperatures, 2) mean power supplied by each generator in a utility system during each hour and 3) energy consumed by each customer per hour recorded in calendar-time; computers that are programed with software developed from algorithms that are described in the invention; and a subsystem that feeds back pricing information to consumers. The algorithms continuously generate demand-related hourly prices and bonus/surcharge distributions (during high demand periods), while keeping gross revenues fixed. Taken together all this facilitates inter-utility competition, minimizes regulation, impels more efficient use of utility assets, and provides economic incentives for conservation.

Claims

1. An electronic system, that when superimposed over an electric utility and its associated power pool will emulate and automate commodity-like market operations for retailed electric energy through a melding of cost, supply &

demand, and competitive factors represented by demand related hourly pricing, capped gross revenues, and bonus/surcharge attributions which in turn make possible minimally regulated utility operations, more efficient use of utility assets, improved incentives for conservation, and inter-utility competition, is comprised of;

recording meters that indicate the individual customer'"'"'s energy consumption by hour and date or in calendar-time;

recording meters that indicate mean hourly power supplied by each generator in a utility system in calendar time;

recording meters that indicate the amount of energy being exported and imported by a utility in calendar-time;

a recording meter system that indicates hourly out-of-doors temperatures in calendar-time throughout the utility'"'"'s region;

means for collecting said metered information and feeding it into a utility'"'"'s central computer;

a utility central computer which processes said metered data computing gross-revenue-capped, import-adjusted demand-related hourly prices, bonus/surcharge attributions, and customer billing;

means for feeding back condensed economic information that imparts to consumers the cost for using electric energy at any time; and

a power pool sub system that collects and disseminates to all pool members anticipated demand-related hourly prices for electricity that will be available for export from each pool member, and the amount available, and then following buy decisions, computes interim credits and debits for the energy actually exported or imported, and later determines final prices by splitting differences between estimated and actual demand-related prices, and then adjusts each transaction as indicated.

2. Same as claimed in claim 1, but including a means for generating condensed real-time economic information that is fed back to any consumer in the form of demand-related price and bonus/surcharge indices, is comprised of;

means for generating said indices using projections of demand-related prices and temperatures;

radio means for distributing said indices to any customer'"'"'s premises; and

reception/display means for receiving, storing, and presenting said indices to those customers who desire said information.

3. A process, that is conducted within the utility central computer to determine local utility, demand-related-hourly pricing, or TEP, for the electrical energy being supplied during each hour, consists of the following steps;

assigning to each local utility generator an hourly-fixed cost, dividing said cost by each generator'"'"'s on-line duty cycle which is determined over some interval, i.e. each day, and by its mean delivered power averaged over an extended-period, i.e. each month, to yield a modified cost;

multiplying said modified cost by generator-capacity weighting factors;

summing said weighted-modified costs during any hour for only those generators that are on-line during the hour producing a running-modified hourly total cost,

multiplying said running costs by a factor that is separately determined for each billing period, said factor keeps gross revenues fixed with the exception of fuel cost and profit, which are separately added in, the result being a local utility demand-related price; and

finally

modifying said local utility price by a weighted factor representing imported energy.

4. A process, conducted within the utility central computer, for determining bonus/surcharge attributions, that is comprised of the following steps;

correlating hourly out-of-doors temperatures and customer calendar-time energy consumption deviations from previously determined norms in order to develop surcharge assessments during high demand periods as defined by out-of-doors temperature data;

accumulating a surcharge pool from those customers who have significantly increased consumption from said norms during high demand periods, with individual surcharge assessments being made proportional to increases over normal consumption during said periods and also to temperature differences from stated threshold levels; and

transferring said surcharge pool into a bonus pool which is distributed to customers that either reduce or hold constant, or minimally increase consumption from said norms during said periods, with the bonus amount being proportional to a ratio o of individual bonus-eligible consumption to total system bonus eligible consumption times a deviation-from-norm factor.

5. A method for phasing-in emulated and automated free market operations for electric utilities, said operations employing computations of demand-related hourly prices that yield capped gross revenues, bonus/surcharge distribution, customer billing, and economic feedback, which when combined facilitate inter-utility competition, make more efficient use of utility assets, provide economic incentives for conservation, and minimize regulation, is comprised of the following steps:

computing a post facto demand-related-hourly-price (TEP) for the energy generated from each utility in each hour by charging off the fixed costs associated with each generator in the utility'"'"'s system only when it is on-line, with said hourly price for that generator'"'"'s energy contribution being inversely related to its on-line duty cycle over an interval of a day or so, and to its mean supplied power averaged over an extended period, with said quantity being modified by a weighting function which relates the hourly price contribution to the energy capacity of each generator compared to the total system capacity, with the resulting running-sum-total being modified by a post facto derived proportionality constant whose magnitude is computed to keep gross revenues at prescribed capped levels except for fuel cost adjustments, and with said running price modified by a weighting factor that inserts the price and the amount of energy imported from other utilities during each hour;

grouping customers into consumption categories and gradually introducing said demand related pricing into one group at a time or into only one or two of said groups;

computing bonus/surcharge distributions for each customer based on prescribed manipulations of out-of-doors temperatures and the change in the individual consumer'"'"'s demand as a function of the out-of-doors temperature during high demand periods, this would be introduced subsequent to the introduction of the demand-related pricing;

disseminating to each interconnected utility in a pool, the amount of energy each pool member has available for export in the upcoming hour and its estimated demand-related price, then processing and executing buy orders, and after receiving the exporter'"'"'s actual price, splitting any differences between said estimated demand-related export price and the actual demand-related price at the time of the sale, and finalizing each transaction with said adjusted hourly demand-related price;

combining said final adjusted demand-related price with weighting factors that reflect the price influence of imported energy to create an hourly demand-related price for billing;

disseminating condensed economic data to consumers by means of printed matrix-bills and then by periodic radio broadcasts of hourly indices which are received in display devices located on consumer premises; and

then

billing consumers using their calendar-time watt-hour meter data multiplied by said final import-adjusted, demand-related prices to generate hourly charges onto which are added any bonus/surcharge attributions with said sum total, over any billing period, representing the net billed amount.