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A technological revolution is taking place, and we need to adapt

May 1, 2024

There was a time when the bill from Trico was simply called “the light bill”. This is because lighting was the primary thing for which people needed electricity. But the behind-the-meter world underwent a technological revolution, and electricity became the lifeblood of homes, businesses, farms, and ranches.

A similar shift is occurring today. A technological revolution is creating new forms of energy generation, storage and other grid-enabling services that are changing the operation of the grid from a simple “generate-transmit-distribute” model into something more complex that, if properly leveraged, can deliver vast amounts of value to Members.

In most respects, energy has always been sold as a service. Members do not buy electrons as much as they buy lighting, heating, cooling and now charging services, that are provided by equipment that uses electricity. Electricity consumption in effect is the consumption of energy services.

The Trico electricity system on which our Members depend is changing, powered by technological innovations, increased use of distributed energy resources (DER), and changing Member needs and preferences in an increasingly connected world.

The increasing demand for system reliability and carbon reduction, coupled with the increasing capabilities of DERs, means new price signals are necessary. Rate designs need to follow suit to encourage the beneficial adoption of modern technologies, like electric vehicles and DER. In other words, rate design is a significant part of the changes needed to modernize our grid. Fred Butler, former President of the National Association of Regulatory Utility Commissioners, once said, “You can’t have a smart grid with dumb rates.”

While there are benefits to a straight-forward rate design for Members who want something simple, Trico believes that price structures should evolve towards time-varying prices (TVPs), which recognize that prices are higher when member demand on the system is higher.

Trico has invested in foundational technologies such as advanced metering infrastructure and meter data management systems, which make TVPs possible.

TVPs can take many forms but they work by pricing electricity higher at times when demand on the system is high, incentivizing Members to reduce their electricity use when it is most expensive to generate or when there are capacity constricts on the transmission or distribution system. This reduces stress on the power grid and lowers wholesale energy and capacity costs by reducing the need for inefficient and costly peaking plants. TVPs can allow engaged Members to capture benefits of managing their energy use, and by reducing demand they can produce savings for all Members.

We want to offer options to our Members and provide programs that serve our mission of cost‑effective and sustainable energy solutions. We can tailor rates that help Members and benefit the entire system, and we are committed to doing so. Thank you for being a valued Member.