Dynamic pricing

Definition
On the power grid, dynamic pricing reflects hourly variations in retail power costs and furnishing customers the detail necessary to manage their utility bills in a variety of beneficial ways.

Categories of dynamic pricing
Three principal categories of dynamic pricing include:


 * Real-time pricing – rates are based on hourly fluctuations in wholesale markets, which enable consumers to plan their electric use to coincide with low prices.
 * Peak-time rebate – the traditional blended rate applies, but customers can realize healthy rebates for reducing load during peak periods.
 * Critical-peak pricing – prices can increase by 500% during peak periods, limited to a small number of hours per year. Customers agreeing to reduce usage in such hours will pay slightly lower rates for the remainder of the year.