The economic value of energy-saving technologies from the perspective of the consumer depends on the price of energy (electricity, gas, or other fuel), which varies significantly both for different types of consumers and for different regions of the country.
Electricity and Natural Gas Tariff Analysis
Ideally, to provide accurate information about the economic value of energy savings, prices should be computed directly from real tariffs as defined by utility companies, including time-of-use and seasonal pricing. A large number of utility tariffs are available on the Internet, but the complexity and diversity of tariff structures presents a considerable barrier to using them in practice. Through our Tariff Analysis Project, we are collecting and archiving a statistically complete sample of real utility tariffs and building a set of database and web tools that make this information relatively easy to use in cost-benefit analysis. Electricity tariffs can be very complicated, so the database structures that have been built to accommodate them are quite flexible and can be easily generalized to other commodities.
Marginal Energy Price Analysis
Use of marginal energy prices, instead of average energy prices, represents a valuable refinement to the usual life-cycle cost analysis conducted for proposed appliance energy efficiency standards. Marginal prices, from a consumer perspective, are those prices consumers pay (or save) for their last units of energy used (or saved). For utilities, marginal electricity costs are the costs experienced by utilities for the last kilowatt-hour (kWh) of electricity produced. A utility's marginal cost can be higher or lower than its average price, depending on the relationships between capacity, generation, transmission, and distribution costs.
Our department has developed three methods for estimating marginal energy prices for use in energy efficiency standards rulemakings. These methods are based on extensive and ongoing analysis of data on the range and distribution of marginal energy prices around the country. The methods are:
- regression analysis of household utility bill data
- hourly utility marginal costs
- tariff-based energy bill calculator
Coughlin, Katie, and Bereket Beraki. Non-residential Electricity Prices: A Review of Data Sources and Estimation Methods. 2019. LBNL-2001203. PDF.
Coughlin, Katie, and Bereket Beraki. Residential Electricity Prices: A Review of Data Sources and Estimation Methods. 2018. LBNL-2001169. PDF.