[NTBKtrader]

Why Your Electricity Meter Sucks By Hank Green Tue, 17 Jul 2007:
$this->bbcode_second_pass_quote('', 'M')y electricity meter is about 50 years old, and it's likely that yours is too. Even if it's new, it probably uses the same ancient technology as mine. Those meters were created for a world with cheap, abundant power. Well, the world has changed...so why hasn't my electricity meter?

It turns out, that if all United States power companies were to upgrade to new electricity meters today, America would save roughly $35 billion in energy costs over twenty years and it would eliminate the need for around 625 power plants. How could something as simple as an electricity meter suck so bad?

The most significant (though not only) problem with old electricity meters is that they charge you the same amount no matter what time of day it is. Electric utilities keep a constant supply of electricity flowing out into the world in order to maximize the efficiency of the power plants. At night, electricity flies through the grid and, with no one awake to use it, it simply dissipates. Then during peak hours, all electricity produced by large power plants is used. In fact, expensive and inefficient 'peaker plants' have to be turned on daily to meet demand.

But none of that matters to me. Running my dryer during the day costs exactly as much as running it at night. So why should I change?

This is why the great green state of California commissioned a study three years ago, in which they switched a few thousand Californians to a new kind of electricity meter that charged higher rates at peak hours and lower rates at off-peak times.

And now, the results are in. People with programmable thermostats decreased their peak power use by as much as 10%, and no consumers in the study didn't decrease their peak power use substantially. The Brattle Group recently got a hold of this data and they've done some economic analysis that knocked my socks off. Their report, which is where I got the statistics above, is shocking.

New meters that enable "dynamic pricing" programs would decrease the energy use of America by 5% minimum. If broader technology applications were put into place, such as in-home power plants, plug-in hybrid-to-grid technology and other so-called "peak shavers" we could decrease the electricity demand of America by 20% in 20 years!

On top of that, the program would eliminate the need for expensive peaker plants, reduce greenhouse emissions, and reduce or eliminate brownouts. More than that, though, i just makes sense that you'd pay more when demand is higher and supply lower. Isn't that how economics works? Apparently not when you let the snail-paced power companies lead the charge.

[gampy]

I don't know what the US is doing, but here in Ontario, Canada, they are trying to get EVERYONE, and EVERYTHING hooked up to smart meters.
Nice little blurb and FAQ from CBC about Ontario's efforts. link
There are still bugs to work out, and it won't reduce energy bills and usage anytime soon, but the hope is to reduce demand during peak hours by 5-10 %. I imagine other provinces and states will follow suit if Ontario's efforts and investment work.

[canis_lupus]

I don't want to be a wet blanket here, but does the author have sources?

"Around 625 power plants" sounds...fishy. 625 power plants don't cost 35 billion over 20 years.

[cube]

$this->bbcode_second_pass_quote('canis_lupus', 'I') don't want to be a wet blanket here, but does the author have sources?

"Around 625 power plants" sounds...fishy. 625 power plants don't cost 35 billion over 20 years.

[peasea]

this may turn out like the economy 7 white meters here in UK, A freind of mine used the low tarrif electricty over night for washing machines and tumble dryers and the like to cust his cost but then when they installed a new meter they changed the meter setting so he looses 3 hours of cheap time each night now.

- meaning if the electric companies notice lost revenue they'll change the pricing plans to compensate ..................

[Sleepybag]

I don't know the situation in the States, but here in The Netherlands, a lot of people have an electricity meter with two clocks. On workdays, twice a day, a signal is send over the grid, which forces one clock to start metering, while the other is stopped. This way, one meter functions as the daytime meter and the other as the nighttime meter. Obviously, the two timeframes also have different tariffs. A kilowatt consumed during 'cheap' time costs 7 cents, while a 'peak ' time kilowatt will cost 20 cents.

This practice has been used since the 1970's. It's nothing new. People will shift laudry and ironing activities to night and evening hours to avoid paying extra during the expensive electricity hours.

[TommyJefferson]

$this->bbcode_second_pass_quote('Sleepybag', 'h')ere in The Netherlands, a lot of people have an electricity meter with two clocks.

[BigTex]

This post is ironic because I just went to a time of use rate plan with my electric utility. The standard charge is about $.12 per kwh. The time of use plan is about $.095 per kwh between 8pm and 3pm and $.145 per kwh between 3pm and 8pm.

What is a little sad is that I am apparently one of only a handful of the utility's residential customers on this plan, and I only learned about it during a very close study of the company's website. In other words, they're not promoting it and people aren't asking about it, even though it's a chance to save money and lighten the utility's peak demand.

It's driving my wife crazy, but I have put timers on a lot of the devices in our house and they turn off between 3pm and 8pm (or longer). I may have to scale this back a little.

Anyone who isn't on a plan like this should ask their utility about it. It's an opportunity to save some money.

[dhfenton]

I have wanted to do "time of day" metering in my home for years. And I have a brand new meter; but my electric company doesn't allow residential users to participate in this program. Why is that?

I have to believe that if you acknowledge that residential use is primarily off-peak, then they know that if residential customers pay less, then commercial customers would have to pay more. By having residentials pay a uniform rate, regardless of when the power is used, it helps keep commercial rates lower. And, here in NY, the state public service commission has a subsidy in place for all residential customers at least until 2009. So it throws the system out of whack even more. The residential customer has no clue what the price of electricity really is on the open market.

Typically you can buy power at 3 cents/kWh, or less, in the middle of the night, and the price often goes to 14 cents/kWh in the afternoon, sometimes even higher. I've seen it selling for over $1/ kWh at times. Until all electric customers are put on time of day metering, and everyone; industrial, commercial and residential, has modified their operations to minimize peaks in demand we're all going to pay for part of the afternoon peak. And then you get into the messy business of whether the government regulators will let the generators and distributors of electricity take a hit for lost demand charges to commercial customers. Experience tells me that they're not going to let the big utilities suffer. Somebody's still going to pay. Its all about $$$$.

[TommyJefferson]

$this->bbcode_second_pass_quote('BigTex', 'T')he time of use plan is about $.095 per kwh between 8pm and 3pm and $.145 per kwh between 3pm and 8pm.

[BigTex]

$this->bbcode_second_pass_quote('TommyJefferson', '')$this->bbcode_second_pass_quote('BigTex', 'T')he time of use plan is about $.095 per kwh between 8pm and 3pm and $.145 per kwh between 3pm and 8pm.

[dhfenton]

Wow $.095 during late evening and night time hours seems really high. Is that the toal cost including transmission & distribution? It probably is, and in that case $.05/kWh differential is pretty good, and quite an incentive to use night-time electricity. Have your neighbors switched as well, and how have you changed your usage pattern? Laundry, dishwasher, showers, pool filters at night, that type of thing?

[BigTex]

$this->bbcode_second_pass_quote('dhfenton', 'W')ow $.095 during late evening and night time hours seems really high. Is that the toal cost including transmission & distribution? It probably is, and in that case $.05/kWh differential is pretty good, and quite an incentive to use night-time electricity. Have your neighbors switched as well, and how have you changed your usage pattern? Laundry, dishwasher, showers, pool filters at night, that type of thing?

[aahala]

Implementing time of use rates at the consumer level are not
very cost effective and not particularly useful. How often do you
now consume more than 10KW in a single hour?

Now imagine a hot day and you have time of use rates. Are you
going to turn off your AC or delay the laundry because rates are
4 cents higher? The savings for two hours may not even buy a bottle of water, or pay for your mornings cell phone calls.

[BigTex]

$this->bbcode_second_pass_quote('aahala', 'I')mplementing time of use rates at the consumer level are not
very cost effective and not particularly useful. How often do you
now consume more than 10KW in a single hour?

Now imagine a hot day and you have time of use rates. Are you
going to turn off your AC or delay the laundry because rates are
4 cents higher? The savings for two hours may not even buy a bottle of water, or pay for your mornings cell phone calls.

[aahala]

Big Tex I think our differences on this application is we are talking about slightly different things.

My post was meant to be about using this idea as a treatment to peak costs. The costs of producing and delivering electricity are pretty insensitive to total demand, between day or night or winter and summer.

Where the costs rise dramatically is during peak, meaning the demand is reaching a very high percentage of total capacity. This doesn't occur often compared to the hours in the year. Something on the order of 10-20 hours per year. Unless Enron is in charge.

Dynamic pricing is used and can work if the user is high volume like an industrial plant. But consumers aren't going to change behavior if their price rises only during peak and changing their timing of useage doesn't matter much other than when peak is occuring. Now if you like the time of day pricing you have, fine. But it doesn't do much for total production costs and it does virtually nothing for the real bottleneck, peak costs.

[BigTex]

$this->bbcode_second_pass_quote('aahala', '[')b]Big TexI think our differences on this application is we are talking about slightly different things. -snip-
Now if you like the time of day pricing you have, fine. But it doesn't
do much for total production costs and it does virtually nothing
for the real bottleneck, peak costs.