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.

Simple Electricity Tariffs

04/14/19

“What is the simplest type of energy tariff?”

In order for energy companies to survive, they need to find a way to charge money for the energy they produced. This is usually done through an Electricity Tariff. The most simple type of electricity tariffs is known as Simple Electricity Tariffs. These tariffs simple charge money in direct proportion to energy consumed. The advantages of this is that it simple, easy to understand and implement, and directly responds to how much electricity is used per-capita. However, the drawbacks is that these tariffs cannot be tailored to specific group’s needs, which can lead to higher cost, provides no incentive to consume more electricity, and if no electricity is purchased during the month then the utility can die.