The Power of Five Percent: How Dynamic Pricing Can Save $35 Billion in Electricity Costs

Rising electricity costs are once again dominating the headlines. One way to lower these costs is to avoid the construction of expensive peaking power plants.

This analysis, undertaken by The Brattle Group, shows that demand response programs based on advanced metering and dynamic pricing could reduce peak load in the United States by at least 5 percent over the next few years.

If such a 5 percent reduction is achieved, Brattle estimates savings of approximately $3 billion per year in electricity costs. The discounted present value of these savings would be $35 billion over the next 20 years.