Peak Energy Demand/Market-based Pricing

California has been going through some rough times the past few days. We've hit a major heat wave that is breaking record highs left and right.

Yesterday, the California Independent System Operators (ISOs) actually called a Stage 2 Power Alert. The power grid delivered more electricity at peak (50,270 megawatts)than had ever happened previously. Apparently the amount of power consumed was forecast to occur in 2011, not 2006! (A Stage 3 Power Alert means that there is more demand than there is power. To keep the system up, the ISOs perform "rolling" blackouts, where different areas have a 100% power loss for a period of time.)

I have a simple solution to this problem. I'm sure I am not the first person to think of this, but then I haven't seen a lot of discussion about it either.

Introduce market-based pricing to energy consumption.

If there is low demand for power, the price of power from the grid should drop. If there is high demand, the price should rise. No more pleas from the Governor of California to reduce power consumption. You can bet that people won't be doing their laundry when the price of running the dryer is double. Businesses will curtail consumption.

A no-brainer if there ever was one.

p.s. Sounds like an opportunity for the right entrepreneur

Aha! I'm not the first person to think about this - good :-)

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