I want to quit lying to my programmable thermostat

I’m lying to my programmable thermostat, a Honeywell Home wifi-enabled smart programmable model. I want to quit, but I have to do it to get what I want. Am I wrong?

Here is what I mean. I buy electric power from my local electric monopoly on a time-of-use rate. From 3 PM to 6 PM on weekdays during July and August the price I pay is about 4X the offpeak rate. (May, June, Sept, and Oct the peak is about 3X the offpeak rate.)

It makes sense to shift power consumption, particularly for the largest energy consuming device in most Arizona homes: the air conditioner. After the thermostat was installed the first order of business was setting the schedule. This is when the lying started.

You see, my thermostat has a handy programming interface that aims to make it simple for consumers to use. You tell it what temperatures you want when you wake up, while you are away during the day, when you return in the evening, and while you sleep. It does the rest!

Which would be great except there is no way to tell it to shift load away from my TOU peak rate period. So, as the image shows, I am telling the thermostat I wake at midnight, leave the house at 2:45 PM, return at 3:00 PM, and go to sleep at 7:30 PM. None of those things are true, but I trick the thermostat into saving me money.

Do I really leave at 2:45 PM and return home at 3:00 PM? No I do not.

I’m estimating that I save about a $1 every weekday by pre-cooling the house before 3 PM and then letting the temperature rise (to about my limit at 83F). Actually I save a bit more than $1/weekday in July and August and a bit less in the other months from May to October. By the end of October I expect to have saved enough to cover the price of the thermostat.

The chart below shows my average July energy use per hour during weekdays, but excluding July 11. On July 11 the local utility called an “energy conservation event,” and I’m enrolled in a program that lets them temporarily reprogram my thermostat to save energy when the grid is stressed. Turns out that they do what I am trying to do, though maybe they are a little better at it than I am.

I’d like to do even better. The red line in the chart represents my July average. Notice the V-shape indicating that energy use bounces back steadily. The blue line is the performance on July 11 when the local utility was in control. They achieved more of a U-shape, delaying most of the recovery until after the peak rate ended.

Either I need to tell better and more elaborate lies to my thermostat, or it and me learn how to communicate better together and I can finally tell it the truth.

The truth might not set me free, but it might allow me to boost my energy savings another 20 or 30 percent. I’d like that.

Retail power rates before and after retail restructuring

How have retail power prices changed due to reforms enabling customer choice of electric power suppliers? Here is a chart summarizing average changes before and after 1997, the year the first state began to reform.

Source: Presentation by Brattle Group economist Johannes Pfeifenberger to the National Council of State Legislators Energy Policy Forum, Dec. 6, 2016).

Prior posts have discussed the effects of allowing electric power customers to choose their own electric suppliers (here and here). Many states initiated reforms to allow customer choice explicitly to bring retail power prices down, so many assessments of reform have been concentrated on the price effects.

It seems like an easy task to compare prices before reform and prices after, but easy comparisons can be misleading because they ignore other influences on power prices not directly related to allowing customer choice. For example, natural gas prices have seen dramatic ups and downs over the last 20 years and those fuel price changes will affect retail power prices. We would only want to credit retail price reforms for the benefits of low natural gas prices (or blame them for the burden of high natural gas prices) if the reforms themselves caused those price changes.

Wholesale market reforms may have enabled growth in natural gas generation capacity, but it does not seem that retail customer choice independently has increased demand or otherwise directly affected natural gas markets. Instead, the fracking-driven boom in supply and, more recently, increasing exports of LNG seem to have driven natural gas price trends over the past two decades.

So I’ll repeat the warning from one of the previous blog posts which also applies here:
“[T]he chart above isn’t a sophisticated analysis of the causes of electricity rate changes. It would take a lot more advanced analysis to solidly back the claim that competition produced lower rates.”

Some economists and data analysts have sought to produce the necessary analysis. I’ll discuss some of these works in future posts.

Surprised to see NFIB promoting electric monopolies in Arizona, especially as competition is bringing rates down for small businesses elsewhere

“Over the period [2001-2020], Arizona’s electric rates for commercial customers have increased 2.74¢/kWh (a 37% increase over 2001 rates) whereas similar rates in New York, Illinois, and Ohio have increased by only 1 to 1.5¢ and rates in Texas and Pennsylvania have fallen.”

Last week the Arizona Senate discussed SB1631, a bill that would repeal the state’s stated policy of promoting competition in electric power service. It’s the companion of HB2101 that I discussed in a post two weeks ago: “Electric monopolies in Arizona fear their customers would leave if given the chance.”

I was listening to the Senate’s Natural Resources, Energy, and Water committee discussion of the bill and was surprised to see the AZ representative of the National Federation of Independent Business stand up in support of this bill, which is to say for monopoly and opposed to competition. (Video of the committee’s discussion is here. The link takes you to the start of the discussion at the 0:49 mark, NFIB’s Chad Heinrich appears just after the 1:19 mark.)

Now Mr. Heinrich reports that the position is the result of a vote by his members, and that is a perfectly respectable way for a group to choose positions. But the organization should also help its members understand the context of the vote. Arizona’s commercial ratepayers may be paying a little extra because consumers are locked into monopoly providers.

The following chart shows the change in average commercial electric rates since 2001 for several states. I’ve shown the U.S. average (blue) and Arizona (light green) along with the five largest states to allow commercial customers to choose electric suppliers: Texas, New York, Pennsylvania, Illinois, and Ohio. (You can look at the data yourself. Click the link to see this data via the EIA’s Electricity Data Browser. Go explore.)

Now the chart above isn’t a sophisticated analysis of the causes of electricity rate changes. It would take a lot more advanced analysis to solidly back the claim that competition produced lower rates. (Some relevant advanced analysis was discussed in my HB2021 post.)

Still, at first glance, over the period available in EIA’s Electricity Data Browser, Arizona’s rates for commercial customers have increased 2.74¢/kWh (a 37% increase over 2001 rates) whereas similar rates in New York, Illinois, and Ohio have increased by only 1 to 1.5¢ and rates in Texas and Pennsylvania have fallen. Again, the chart is not conclusive evidence, but if a monopoly lobbyist wants to reject the suggestive picture above or dispute the data collected by the U.S. Energy Information Administration, ask them to show their work.

NFIB members in Arizona may want to hear from NFIB members in New York, Pennsylvania, Illinois, Ohio and Texas about the advantages and disadvantages of competitive power markets.

February 2022 #texasfreeze offers ERCOT a practice run

Many Texans faced forecasts of the early February 2022 winter storm with a degree of anxiety. Last year’s energy system failures had horrendous consequences including lost lives and damaged property. The energy system failures in the biggest energy producing state resulted in billions in damages.

The forecasts were clear this year that nothing like last year’s long, deep freeze was expected. Still, many worried.

As it turned out the forecasts were true enough. There was a two-day period with temperatures stuck below freezing, but nothing like last year. In February 2021 the Dallas-Fort Worth area stayed below freezing for about 130 consecutive hours, but the February 2-5 winter storm remained below freezing just 44 hours.

All in all, the early February freeze made for a practice run for Texas energy suppliers, but not a severe test of the ERCOT-managed power grid. Natural gas supply remains a concern, both because its state regulator appeared relatively unconcerned about last year’s failures and because productions has dipped with freezing temperatures this winter.

The chart below shows temperatures at Dallas Love Field, starting with the hour before temperatures dropped below freezing and ending when temperatures rose above freezing. The early February 2022 event is shown in blue and the solid black is a January 2018 cold snap it resembles. The January 2018 did not produce any serious problems for ERCOT, so there would be few reasons to expect this similar freeze to be a challenge either.

Three other winter weather events are shown for comparison, including last year’s freeze and the February 2011 winter storm. Data described below.

February 2022 is not over yet and we may yet get another winter blast in Texas. No one should declare “mission accomplished.” But the cold did let ERCOT practice it’s “all hands on deck” winter response. They’ll also get a chance to review how things went and be better ready next time.

Chart data: Data above for 2011-2021 collected from the NOAA’s National Centers for Environmental Information. The NCEI data runs about 3 to 5 days behind the present, so I hand scraped hourly data from the Weather Underground history page which is up to date. All data from Dallas Love Field. Obviously it is a big state so one location does not tell the full story.