By George Harvey
From a very simple point of view, electric rates are typically arrived at by marking up average wholesale prices, subject to approval by some governmental agency. But since utilities must sell at the standard rate regardless of how little or how much the wholesale power costs, consumers are usually unaware of the great range of those prices. In developed nations, record highs for wholesale grid power are well over $10 per kilowatt hour. And the lowest costs can be deep into negative territory.
Though wholesale power costs normally fluctuate through a much narrower range, they do fluctuate predictably through the 24-hour day. Normally, the highest prices are at high demand times in the afternoon, and the lowest prices are at night, when demand is low.
Unlike solar power, which handily comes on at the very times that demand is strongest, wind turbines can merrily churn out electricity regardless of whether anyone wants it or not. Now TXU, a Dallas-based utility, has figured out how to make money out of that fact.
TXU has special rates for anyone who signs up for wind power. The daytime rate is somewhat higher than the normal rate. However, there is a nice financial incentive to sign up. Between the hours of 9:00 pm and 6:00 am, any quantity of electricity for customers buying wind power is free.
Any sneaky individual (we could include ourselves) might ask how they would make money if we decided, for example, to put in a battery big enough to power the house for a day, and charge it completely every night for free. We could have our power bills go to the connect fee plus zero. Interestingly, TXU would lose very little money on the power they gave us for free, and could even make money on it, if the wholesale price is negative. But they would more than make up for any night-time loss by not having to provide power that costs them a lot at a standard rate during the daytime.
Free electricity is an idea that might catch on.