About 50,000 households in Scarborough and Etobicoke areas are getting a sneak peek at what their electricity bills will look like after Toronto Hydro introduces mandatory time-of-use pricing, probably in the second half of 2008
Canada's largest municipal hydro utility launched the online pilot program this week so customers could get a feel for the new rate system. People will pay a premium for "peak time" electricity use between 7 a.m. and 10 p.m., and get an overnight discount.
The new rate system has been made possible by the introduction of so-called smart meters that allow utilities to track when and how much electricity is being used within a household. The aim is to encourage people to shift their electricity use to periods of low demand, or reduce consumption altogether.
Toronto Hydro has so far installed about 388,000 smart meters in three suburbs and is collecting massive amounts of detailed customer data that the utility never had access to before. The utility now touts Toronto as the most densely "smart metered" location in the world.
Spokesperson Blair Peberdy said the pilot program is just as much about educating customers as it is learning how to best present the new data to people who have never had to interact with their utility before.
"There's really no precedents for us to follow, certainly not in North America," said Peberdy. "There's tremendous amounts of data from every house, and it's coming in every 15 minutes, so having to take all that and edit it down to a coherent bill is a technological challenge."
The current electricity rate is 5 cents per kilowatt-hour. The time-of-use rates used in the program, which are reflective of rates to be introduced next year, are 3 cents per kilowatt-hour between 10 p.m. and 7 a.m.; 8.7 cents between 7 a.m. and 11 a.m. and from 5 p.m. to 8 p.m.; and 7 cents between 11 a.m. and 5 p.m. and from 8 p.m. to 10 p.m.
The government believes smart meters will help people shift and cut back on electricity use, delaying the need to invest in new electricity generation, which, during peak times, tends to be generated from a fossil fuel, such as natural gas.
The meters are also expected to improve how the electricity system is managed, by giving utilities better information on consumption trends and instant alerts to outages and other anomalies.
But the idea is proving a hard sell for some. A number of groups, including those on fixed and low incomes, owners of seasonal residences, small businesses and some condominium owners say they're being forced to accept and pay for smart meters that are unlikely to provide any benefits.
Frank Osatchuk has a property he uses about six months out of the year.
"It is closed in the winter with the power shut off," he said. "My electricity consumption averages less than $20 per year. How will this meter save hydro for me?"
Many small businesses, seniors and people in low-income households argue it is difficult or impossible for them to shift energy use. They say they end up being unfairly penalized with a rate premium.
Owners of some condominiums and energy-efficient houses have pointed out that their electricity bills are already so low that cost savings from shifting use will not compensate for the additional monthly fee that will appear on bills to pay for the cost of smart-meter deployment in Ontario.
"An owner living an already energy-efficient lifestyle would have to cut their energy consumption by an additional 68 per cent just to break even on the cost associated with smart metering," Anne and Les Wynne wrote recently in a letter of protest to Premier Dalton McGuinty. The two live in the Marina Del Rey condominium complex on Lake Shore Blvd. W. in Etobicoke.
But Rick Rakus, chief executive of Enbridge Electric, which deploys sub-meters in the condominium market, said some condo units, contrary to popular belief, are energy hogs that are subsidized by their neighbours.
Sub-meters, he added, save the energy-conscious person from having to pay for the excess consumption of another person who may be operating a small business from home, running an illegal grow-op or loaded up with power-hungry gadgets and home-entertainment equipment.
"One customer we saw had six computer servers in his condo and was running a home business, while another was running laundry facilities out of his unit," said Rakus.
Peberdy said homeowners and businesses do have the option of selecting a fixed rate from an electricity retailer, such as Direct Energy or Bullfrog Power, if they wish to avoid time-of-use pricing.
He said the meters won't directly benefit everybody, but added that the improvements brought to the electricity grid will encourage efficiencies.
Shahid Alam, who lives with his wife and two cats in a modest house in Milton, said he's convinced that time-of-use pricing is the way to go.
In September, he joined a pilot project run by Milton Hydro and Direct Energy that lets people remotely access information about their energy use.
He's not paying time-of-use rates yet, but he's eager to start.
"Once the different price ranges come out, it would be very applicable to my lifestyle," said Alam.
"This is a really good educational tool to make people aware of what they're using and when."
Kind Regards
Grant Rowe
www.worldofrenewables.com
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