WASHINGTON – People could save as much as $15 billion annually if they had more information about fluctuations in the price of electricity and then acted to cut power usage when prices were expected to be high, congressional investigators conclude.
In a study examining experimental programs in real-time power-pricing (search), they said widespread use of "demand-response" programs would cut electricity bills and ease pressure on grid systems during peak demand periods.
The study by the Government Accountability Office (search) focused on pilot programs in New York, Georgia, Florida and New York. It examined power costs for 53 government buildings, about two-thirds of which participated in a programs where electricity use could be reduced at a time when the cost was expected to be highest.
The findings, and an examination of various private studies on the pilot programs in recent years, showed that "widespread use demand-response programs could result in savings ranging from $5 billion to $15 billion, depending on the extent of the participation and the cost implementation," according to the auditing arm of Congress.
Sen. Susan Collins (search), R-Maine, who asked for the study, said "most consumers are not given the option of saving money on their electricity bills by using electricity at off-peak times" or cutting back on power use when prices get expensive.
That is because both residential and commercial customers do not know the real-time cost of electricity at any given time or lack the equipment or communication ties with utilities to adjust power use with changes in price, the study said.
"Our current system is tilted toward more supply always being the answer," said Collins, who on Sunday made available a copy of the findings.
The agency said that during a heat wave in New York in 2001, demand response programs saved customers $13 million because power use was temporarily curtailed. An experimental program in Florida achieved average savings of 11 percent in annual electricity costs.
The federal government saved an estimated $1.9 million in electricity costs in 13 of the buildings that participated in a demand-response program from 1999 to 2003, the report said.
If such programs were put in place in all of largest nonmilitary government buildings, the savings could reach $114 million over five years, the study said.
The report also cited examples such as:
— the manager of a textile mill in rural Georgia who cut the use of power from a utility during high-price periods and, instead, used an onsite generator, saving $1 million a year.
—a group of residential customers in Chicago that reduced their power costs by an average of nearly 20 percent by taking part in a pilot-program where they received notice of price increases in advance so they could cut back their use.
But the GAO said there were significant barriers to expanding such pilot programs.