To peak, or not to peak?
Is time-of-use pricing making a difference?
I spent last week in Toronto, and stopped in to see my mom in Ontario's lake cottage country last weekend on my way home.
Remember my mom? I first introduced you to her in March 2011 in my column "Time-of-use rates: boon to whom?" At that time, my parents were six months into a switch to time-of-use rates and monthly billing (from bi-monthly billing), and my mother was so far unimpressed with the entire situation. She was diligently doing her laundry, running her dishwasher and doing her ironing all during the off-peak period (at that time, between 9 p.m. and 7 a.m.), but not seeing much change in her bill as a result.
As we went through her bills back then, it was clear why her change in usage wasn't changing her bill. Remember, time-of-use billing affects only the electricity or commodity, cost. That's the charge for the electricity itself. Then there's the delivery charge. Add to that a regulatory charge (a percentage of electricity used) and a debt retirement charge (another percentage cost), and it was easy to see where the bulk of the bill was. It was in the line charges.
This visit, I didn't ask to see her bills, but of course, given my interest, the discussion drifted there all the same.
We talked about Saturday laundry and ironing, and we filled the dishwasher to capacity after a family Sunday brunch, but hadn't yet run it when I left for the airport at suppertime. (Weekends and holidays are always off-peak hours, at 6.5 cents/kWh, from Friday at 7 p.m. to Monday morning at 7 a.m.) I asked her how she was managing with regard to peak hours (in the summer, in Ontario, peak hours run from 11 a.m. to 5 p.m., at a rate of 11.7 cents/kWh), and she proudly announced that she was consistently keeping her peak billing hours at one kWh per month. Period.
And she's not the only one. A CBC story earlier this month, "Why the power stayed on during Ontario's heat waves," noted that, while declining manufacturing in the province has reduced demand since they power peak heydays of 2006, in which Ontario struggled at times to keep the lights on, there are other reasons for the reduced demand, as well. One, the CBC said, was "power conservation measures that residents have adopted as well as incentives to use their dishwashers or washing machines at off-hours when the cost of electricity is lower."
Alexandra Campbell, a spokeswoman for Ontario's Independent Electricity System Operator, told the CBC that a lot of the shift in usage by residential customers was a shift to the weekends, when off-peak pricing is in effect all day long. "So where people can do laundry and other things on the weekend, they're doing that, but there's also people waiting until 7 o'clock before they plug in their phone to recharge it or have their shower or that kind of thing," she said.
Overall across the province of Ontario, peak demand for power consumption on extreme weather days has lessened by 2,500 MW to 3,000 MW, a considerable drop.
But it's not all cotton candy and puppies, daisies and kittens. There's no real way of deciphering how much of the lessening of peak demand is due to the loss of manufacturing facilities in Ontario, and how much is due to residential customers changing their usage patterns to take advantage of cheaper rates, according to Ontario's Independent Electricity System Operator.
In an article published in the IEEE Spectrum this month, "Smart conservation for the lazy consumer," authors Marc Mosko and Victoria Bellotti posit that efforts at time-of-use pricing by the Ontario Energy Board and others "have done little to alter usage patterns." Mosko and Bellotti cite Anthony Haines, Toronto Hydro Electric System's chief executive, saying he "believes that the savings are simply too modest. He thinks that peak electricity would have to cost 10 times as much as off-peak energy before utilities would move even 5 percent of their customers in the right direction."
If that's the case, then why are we doing it?
Are there analytics yet in place that can show, definitively, what benefits are being derived from time-of-use pricing?
I don't want to have to be the one to tell my mom that her energy-saving efforts were all for naught. She will not be a happy camper, believe me!
Editor-in-chief, Intelligent Utility magazine