TC Light & Power Prepares to Move to Time-of-Use Rates – The Ticker

Report on Traverse City Light & Power’s Transition to a Time-of-Use Rate Structure

Introduction: Aligning Local Energy Policy with Global Sustainable Development Goals

Effective December, Traverse City Light & Power (TCLP) will implement a new time-of-use (TOU) rate structure for all customers. This strategic initiative aligns with several key United Nations Sustainable Development Goals (SDGs) by creating a dynamic pricing model that promotes energy efficiency, grid stability, and the use of clean energy. The new system is designed to advance SDG 7 (Affordable and Clean Energy), SDG 11 (Sustainable Cities and Communities), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action) by incentivizing consumers to shift electricity usage to off-peak hours.

Core Objectives of the Time-of-Use Initiative

Promoting Affordable and Clean Energy (SDG 7)

The TOU model is structured to make energy more affordable and cleaner. By offering lower rates during off-peak periods (late evenings, early mornings, weekends, and holidays), the utility encourages a shift in consumption away from times of high demand. This supports SDG 7 by:

• Providing financial incentives that can lower customer bills for those who adjust their usage patterns.
• Facilitating greater integration of renewable energy sources, which are more prevalent during off-peak generation times.
• Reducing the reliance on expensive and carbon-intensive fossil-fuel “peaker” plants that are activated during high-demand periods.

Fostering Responsible Consumption and Production (SDG 12)

A primary goal of the TOU structure is to cultivate more conscious energy consumption habits among residents. The variable pricing directly links the cost of electricity to the real-time cost of its production, encouraging customers to make deliberate choices about when to use high-consumption appliances. This directly supports SDG 12 by encouraging a behavioral shift toward more sustainable consumption patterns, such as running dishwashers, laundry machines, and charging electric vehicles during off-peak hours.

Enhancing Grid Stability and Climate Action (SDG 11 & SDG 13)

By smoothing out demand peaks, the TOU system enhances the resilience and efficiency of the local energy grid, a key component of building sustainable communities (SDG 11). Reducing strain during peak hours lowers the utility’s overall capacity costs, generating savings for both the provider and its customers. This demand management is a critical climate action (SDG 13), as a reduction in peak load directly curtails the need for fossil-fuel-based power generation, thereby lowering greenhouse gas emissions.

Implementation and Customer Engagement Strategy

Program Tiers and Phased Rollout

TCLP will automatically enroll customers in a phased, four-year transition to the full TOU rates. To accommodate varying levels of customer readiness to adapt, two distinct programs are offered:

1. Eco Steady: The default program for all customers, featuring a more moderate difference between on-peak and off-peak rates. This allows for a gradual adjustment to the new pricing model.
2. Eco Champion: An opt-in program for customers willing to more aggressively manage their energy use. It offers greater potential savings through even lower off-peak rates but has higher on-peak charges.

Financial Implications and Equity

The transition is designed to be revenue-neutral for the utility. The new rate structure aims to create a more equitable system where the cost to serve a customer is more accurately reflected in their bill. Key financial points include:

• Off-peak prices will be lower than the current flat rate, while on-peak prices will be higher.
• Customers can potentially lower their overall energy costs by shifting consumption to off-peak times.
• The system promotes fairness by ensuring that customers who use energy during high-cost periods contribute proportionally to those costs.

Support Mechanisms and Strategic Outlook

Customer Resources and Education

To facilitate a smooth transition, TCLP is providing extensive support to help customers understand and adapt to the TOU rates. These resources are essential for empowering consumers to take control of their energy use in alignment with sustainability goals. Available support includes:

• Public open houses to explain the new rate structure.
• An energy coaching program for personalized advice on efficiency optimization.
• Online tools allowing customers to monitor their energy usage in near real-time.
• Recommendations for energy-saving practices, such as using smart thermostats, upgrading to LED lighting, and scheduling appliance use.

This initiative positions TCLP as a forward-thinking utility, adopting a cornerstone industry practice that empowers customers, enhances grid reliability, and makes a tangible contribution to achieving local and global sustainability targets. The TOU structure is a critical step toward creating a cleaner, more affordable, and more sustainable energy future for the community.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

   The article on Traverse City Light & Power’s (TCLP) new time-of-use (TOU) rate structure connects to several Sustainable Development Goals (SDGs) by focusing on energy efficiency, clean energy, climate action, and sustainable community practices.

   • SDG 7: Affordable and Clean Energy: The entire initiative is centered on managing energy consumption to make it more affordable and cleaner. The article states the TOU model encourages shifting energy use to times when electricity is “cheaper and cleaner” and “supports renewable energy.”
   • SDG 11: Sustainable Cities and Communities: The program is implemented by a city-owned utility (TCLP) in Traverse City. It aims to create a more efficient and resilient urban energy infrastructure by reducing “strain on the grid,” which is a key component of a sustainable city.
   • SDG 12: Responsible Consumption and Production: The core of the TOU program is to change consumer behavior. The article notes that customers “will need to make deliberate choices to shift your electricity-consuming activities to off-peak hours,” directly promoting more responsible consumption patterns for energy.
   • SDG 13: Climate Action: A primary benefit highlighted is the positive environmental impact. The article explains that by shifting demand, the system avoids using fossil fuel generators that come online during peak times, which helps to “make the grid cleaner” and allows customers to “have more of an impact on the climate.”

2. What specific targets under those SDGs can be identified based on the article’s content?

   Several specific SDG targets can be linked to the actions described in the article.

   • Under SDG 7 (Affordable and Clean Energy):
     • Target 7.2: Increase substantially the share of renewable energy in the global energy mix. The article supports this by explaining that shifting usage away from peak times reduces the need for “last generators coming online are using fossil fuels,” which in turn “supports renewable energy.”
     • Target 7.3: Double the global rate of improvement in energy efficiency. The utility’s program is designed to improve energy efficiency at both the grid and household levels. TCLP offers an “energy coaching program that can help with looking at energy efficiency optimization” and provides tips like using smart thermostats and charging EVs overnight.
   • Under SDG 11 (Sustainable Cities and Communities):
     • Target 11.6: Reduce the adverse per capita environmental impact of cities. The program directly addresses this by creating a mechanism to lower the city’s overall energy consumption during peak hours, thereby reducing the environmental footprint associated with its energy generation.
   • Under SDG 12 (Responsible Consumption and Production):
     • Target 12.2: Achieve the sustainable management and efficient use of natural resources. The TOU rate structure is a policy tool for managing the efficient use of electricity, encouraging consumers to align their consumption with periods of lower demand and cost.
   • Under SDG 13 (Climate Action):
     • Target 13.2: Integrate climate change measures into national policies, strategies and planning. While at a local level, TCLP’s new rate structure is a clear example of a utility integrating climate change mitigation measures (reducing fossil fuel reliance) into its operational strategy.
     • Target 13.3: Improve education, awareness-raising and human and institutional capacity on climate change mitigation. TCLP is actively working to educate its customers through “two open houses,” an “energy coaching program,” and online tools to check usage, thereby building consumer capacity to mitigate their climate impact.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

   The article implies several metrics that can serve as indicators to measure progress, even if official SDG indicator codes are not mentioned.

   • For Target 7.2 (Renewable Energy):
     • Implied Indicator: Reduction in the use of fossil-fuel-based power generation during peak hours. Progress can be measured by analyzing the energy source mix during on-peak versus off-peak times before and after the TOU implementation.
   • For Target 7.3 (Energy Efficiency):
     • Implied Indicator: Reduction in overall energy demand during on-peak hours. The article states a goal is to “reduce grid demand during on-peak hours,” which is a directly measurable outcome.
     • Implied Indicator: Percentage of energy consumption shifted from on-peak to off-peak hours by customers. TCLP’s ability to track customer usage data allows for the measurement of this behavioral shift.
   • For Target 13.3 (Education and Awareness):
     • Implied Indicator: Customer participation rates in educational programs. This can be measured by tracking attendance at the “open houses” and enrollment in the “energy coaching program.”
     • Implied Indicator: Number of customers opting into the more aggressive “Eco Champion” program. This indicates a higher level of awareness and commitment to changing consumption habits for environmental benefit.

Summary of Findings

Source: traverseticker.com