Data-driven approach for a more sustainable utility rate structure: Power distribution grids across the world are undergoing profound changes due to technological advances

Tollways are preferred by many drivers as they offer a quicker and more convenient way to travel from one point to another. These fees are more expensive during peak traffic hours, like when you commute to work. This structure means that drivers who do not contribute to heavy traffic flow will not be required to pay higher tolls. However, drivers who use the toll road at peak times pay more to access the quicker, more convenient highways.The same goes for electricity usage. Not everyone uses the exact same amount throughout the day. Peak load hours put greater strain on the grid. There are also users who use more electricity during those peak hours than others.Dr. Dr. Individuals who use less power, or use solar power to offset some strain on the distribution grid will be able to benefit from his rate plan. Those who use more power from the electric grid during peak times will pay more.A typical utility bill will show users how much energy was used during a given month. The kilowatt hour rate is also shown. This is multiplied to calculate the due payment. Xie is a data-driven company that aims to modernize the power delivery rates structure in the utility industry.This research was published by Utilities Policy in its June issue.Xie stated that power delivery costs are not always the same for all customers. Furthermore, each customer has a different impact on the grid in terms of its contribution and cost. The use of smart meters that can track energy consumption over a period of time at a 15 minute level is what Xie proposes. This would allow the utility company to have a better understanding of customers who contribute to grid stress and those who use solar panels to reduce their consumption.Xie stated that if a customer sends some of their solar panels back to the grid during peak hours, then they should be considered a positive asset to it and should be compensated. "Another example is if someone uses their air conditioner excessively when the grid is stressed, that person is putting strain on the grid. This individual might have to pay a greater portion of the delivery costs."Grid edge technologies such as solar panels or electric vehicles (EVs) are making power distribution grids around the globe undergo profound changes. Xie's rate model would see end users no longer charged based on their kilowatt hour volumetric consumption but instead charge them a grid access fee which approximates the effect of end-users time-varying demand on their local distribution networks.The case study uses a dataset of 200 residential demand profiles. It includes 50 EV homes and 50 solar photovoltaic homes. There are also 100 non-DER houses. These homes don't have distributed energy resources (DERs) such as an electric car, solar panel, or battery storage device.Customers typically charge their EVs at night, when there is less grid impact. The proposed rate model results in over 90% of EV customers seeing lower bills. The results for solar PV customers are even more diverse. To minimize grid impact, PV customers can combine solar PV with battery storage using a smart scheduling algorithm to charge and discharge. This will result in the greatest cost savings on their bills. Non-DER customers saw a slight drop in their bills due to the rate proposal.Xie stated that the most exciting aspect of technology innovation is its ability to make a real-world difference. "That impact will pave the way to a more sustainably operated grid, leading to a more sustainable tomorrow."This research was partially supported by the Power Systems Engineering Research Center, and partly by National Science Foundation.