Monday, July 21, 2008

Time of Use Rates and "Smart Meters"

Today's interesting New York Times article, Rewarding Those Who Wait to Flip the Switch, explores why residential time of use rates, offered for many years by Con Edison and other electric utilities, have not received wide customer acceptance.

Those who advocate widespread replacement of millions of existing meters with so-called "smart" meters would be well advised to study the lessons of the existing time of use rate programs. According to The Times:
only 2,500 residential customers — out of 2.7 million in New York City and Westchester — pay time-of-use rates. Anyone who spends even a modest amount of time at home on weekday afternoons, including people with young children, the elderly and the bedridden, would most likely end up paying more for their electricity.

It is also questionable how much money people who live in apartments can save since many of them lack big electricity guzzlers like washing machines, dryers and pools that can be used during off-peak hours to save money. For many apartment dwellers, air-conditioners and refrigerators (which are rarely turned off) consume the most electricity, so there are fewer ways to save.

Before yielding to pressure from utilities, technology, and market enthusiasts to spend billions of dollars, yes, billions in New York State alone, we need to learn a bit more about why time differentiated rates are not popular with the overwhelming majority of consumers. Also, before putting billions on the table for non cost effective measures, we need to explore whether there are better investments of consumers' dollars to be made, for example, in the areas of energy efficiency or development of renewable energy alternatives.

Not so Smart? High Tech Metering May Harm Low Income Electricity Customers;

New York Residential Real Time Pricing Experiments Must be Voluntary;

PSC Requires More Study Before Allowing Major Investment in "Smart Meters"

The time of use rate now available does not require expensive new "smart" or digital meters.

Calculating the Difference Between Time of Use Rates and Regular Rates
The Times article states "[c]ompared with standard summer rates, time-of-use customers pay three times more for electricity between 10 a.m. and 10 p.m. on weekdays, yet 80 percent less at other times." By our calculation, based on the July 11, 2008 Con Edison rate changes, a time of use rate customer using electricity during the peak hours of 10 AM to 10 PM would pay about 20 cents/kwh more than the customer on the regular rate. In the off-peak hours, she would pay about 11.7 cents/kwh less. Con Edison rates change each month, often unpredictably.

PULP's Con Edison Bill Estimator
If you are now on a Con Edison residential time of use rate and want to calculate whether you would have paid more or less if you received service at the regular rate, try PULP's Con Edison Bill Estimator. Just enter in the billing period dates and total usage peak and off-peak to find out what the bill would be.

1 comment:

Anonymous said...

You stated The time of use rate now available does not require expensive new "smart" or digital meters. Actually it does - the TOU meters put in during the early 90's mandatory TOU program are digital meters. They are not "smart" in the sense that they can be read remotely, or monitored on a regular basis from elsewhere, but they are, without question, digital meters capable of recording time of use.

Regular meters can be billed on the basis of higher rates during summer hours, but they are not capable of telling Con Ed how much electric was used at certain times of the day.