Flat Rate Tariffs

04/15/19

“How does a flat rate work for electricity usage?”

Utilities produce revenue through electricity tariffs. Although not the simplest, another simple type of tariff is the Flat Rate Tariff. Despite the name, these tariffs still charge in proportion to electricity usage. Rather, they are called flat rate since they do not discriminate based on time of use. What differentiates flat rate tariffs from simple tariffs is that they can distinguish between different types of consumers, such as residential or commercial. The advantages of flat rate tariffs is their simple implementation, while their primary drawback is their inability to incentive different times of use, a necessity to mitigate the duck curve.