Results from a pilot project in Oklahoma show that having a wider TOU price gap will encourage more peak-period conservation and shifting of electricity use, a finding that contrasts with the experience in Ontario, where the price gap and the market signal it sends is very weak. In the Oklahoma trial, pricing ranged from 4.2 cents (U.S.) for off-peak times and up to 46 cents for critical peaks, compared to a range of 5.1 to 9.9 cents at an Ontario utility such as Toronto Hydro.

Some participants in the Oklahoma pilot achieved a 57 per cent reduction in energy use during peak periods compared to a control group, while the average reduction was 33 per cent during highest-price periods. Widening the TOU price range in Ontario is crucial to realizing the benefits of smart meters and to enabling competitive services from third-party retailers, including storage services.

My Clean Break column for Friday (published online today) explores the importance of demographics when creating and implementing energy policies, such as time-of-using pricing. My observation over the past few years is that those most vocal against green energy and time-of-use plans tend to be folks on fixed incomes — i.e. mostly seniors — who are understandably worried about higher energy costs and how they, along with other costs of living, are rising relative to incomes. If the baby boomers are just beginning to enter their retirement years, staying at home more (meaning using air conditioning and heating more) and many are struggling to survive on fixed incomes, what does this mean for energy policy?

I asked demographer David Foot, author of the well-known book Boom, Bust and Echo, and he confirmed there is a strong tension between the wants and needs and concerns of baby boomers and the kinds of energy policies and program we so desperately need. But, as he said, boomers occupy the largest voting block, they tend to vote more often than generations after them, and this means politicians can’t ignore their concerns and need to design programs carefully and equitably. As you’ll read in my column, as people age they tend to use more energy per capita. Our aging bodies, quite simply, need to be kept cooler in the summer and warmer in the winter. If energy prices are rising and a greater per cent of the population will be spending their days at home, how will this impact the silver tsunami and attempts to get a handle of greenhouse gas emissions?

Not to generalize. There are plenty of folks in this demographic willing to make the sacrifice, even if it affects them more than others. But those wanting equal treatment have a point and they should be heard. Food for thought.

NOTE: I see the folks over at Wind Concerns Ontario have seized on the column and misinterpreted its message, suggesting that I am “eagerly awaiting boomers to die off.” They’re a venomous, very angry bunch over there – at least those who do the postings and comments – but this only undermines their own efforts. There’s no room for mature debate or constructive comment over there. Either you support their view or you’re an idiot, a word they frequently label on me. And people want them to be taken seriously?

Of course, my column is actually pointing out the legitimate concerns that baby boomers have and how current policies are failing to appreciate them. I actually wrote the piece because of concerns my mother, who is a retired first wave boomer on a pension, expressed regarding the difficulty of paying rising power prices. The message of the column is that blanket programs can miss the mark and more care must be taken to craft them.

Smart meters and time-of-use pricing are always well-read stories because there’s true division within the general public on whether smart meters are consumer-friendly gadgets that encourage conservation or utility-friendly devices that make it easier to gouge consumers. See my story in the Toronto Star from Friday. My take is that electricity prices are going up whether we get smart meters or not, and that smart meters — and the applications they enable — offer households a way to shift and even lower their electricity use to buffer the impact of rising prices. The mistake — and again, just my view — is that smart meters have been improperly marketed to consumers as some kind of sexy wonder tool that will help them lower their bills. Instead, utilities should have downplayed the introduction and simply moved ahead with their installation as part of a less exciting grid modernization play — equivalent to a telecom company upgrading from analog to digital networks so that, down the road, new services can be offered to customers. Customers don’t care about the bandwidth, they just care about the handsets and what they can do.

By positioning smart meters as more of an infrastructure play the cost of deployment can be simply incorporated into annual capital budgets and households are more resigned to the fact that getting the new device is mandatory. Let’s face it, initially smart meters are about helping utilities manage their networks better — i.e. they can pinpoint problems and do more detailed analysis of individual household, neighbourhood, and community power consumption, improving system planning and maintenance operations and preparing utilities for increased distributed generation in their service territories.

By making this seem like some gift to consumers, as has been done, utilities open themselves up to consumers expecting certain results and wanting the option of getting or not getting the smart meter. (more…)

About 10,000 Toronto Hydro customers already on smart meters will soon be moving to time-of-use pricing and the rest will be moving by the end of this year, so it makes sense that the utility give folks a way to actually see their electricity use. The company just announced this morning it will be testing out Google’s PowerMeter on select customers, making it the first Canadian utility to do so. If the trial is successful, Toronto Hydro said it may make the software available to all of its customer. Keep in mind the information provided through the Google PowerMeter won’t be granular — i.e., it won’t provide energy usage of individual appliances; just overall residential energy use.

NOTE: My story in the Toronto Star.