Time-of-use pricing works: pilot project
The Ontario Energy Board released results last week of a time-of-use pilot project in Ottawa involving 375 households equipment with smart meters. The results, based on an analysis of electricity use between Aug. 1, 2006 and Feb. 28, 2007, found that average reduction in electricity demand among two-thirds of participants was 20 per cent during “high demand or critical peak hours” in the summer. And on average, participants on time-of-use pricing plans (i.e. they paid more during periods of peak demand) reduced their overall electricity consumption by 6 per cent compared to a similar-sized group of Hydro Ottawa customers who weren’t in a time-of-use price program. The project also found that those who had to pay the highest price per kilowatt hour during peak time (as much at 30 cents per kilowatt-hour) were more likely to shift their electricity use to off-peak times. IBM and consulting firm eMeter conducted the pilot study, which the energy board will use to help craft future time-of-use prices as smart meters are deployed across Ontario. Oakville Hydro, Veridian, Newmarket Hydro and Hydro One are also conducting their own pilot studies.
As an aside, a recent study out of the University of Toronto suggests that households in the city be charged on a pay-per-use and time-of-use basis as a way to raise funds to upgrade the city’s deteriorating sewer and water infrastructure. This, of course, would require smart meters similar to the ones being introduced for electricity. This raises a big issue. If we’re going to consider smart meters for water, then should we reconsider our strategy for electricity and look at installing a single technology infrastructure that can monitor water, natural gas and electricity use in households? Should we be going down a path where we end up, needlessly, having three separate smart meter systems supporting three separate time-of-use programs? I think it’s an issue that needs to be discussed now before we head down each of these paths.