Smart meters collect detailed energy usage data at certain time intervals. When initially deployed, utilities and government entities will talk up the reasons and benefits as being “to provide users with more information in order to better manage their energy”. Consumers who have studied the smart grid and the purpose of smart meters will point to their main purpose as being necessary for “time of use (TOU) billing.” Utilities and government officials will accuse them of “fear mongering”.
Well, California is ahead of Florida, so let’s look at their experience with smart meters. A few days ago, San Francisco Gate reported that the California Public Utilities Commission is proposing sweeping new rate changes for California’s Investor Owned Utilities. Guess what they entail – time of use pricing!
SF Gate reports that residential customers with typical monthly usage of 600 kilowatts will see their bills rise 13% if they stay on flat rates and 16% if they switch to TOU pricing and don’t “change their habits”. What changes in habit are they talking about? Running those dishwashers and washing machines at times that they don’t want you to use energy.
For residential customers who use 1200 kilowatts, well they will see reductions of 14-17% in their bills. What you say? Hasn’t everyone been saying we need to conserve energy so we don’t have to build power plants and turn on peak power plants? The article goes on to claim that changes made during the last energy crisis caused an imbalance in pricing where heavy users were subsidizing low users.
Although there is a choice, note that everyone will be automatically enrolled in TOU pricing unless they “specifically” choose to stick with tiered rates.
Last year, Sacramento Municipal Utility District (SMUD) proposed time of use pricing too. An editorial in the Sacramento Bee stated “The current system results in heavy users unfairly subsidizing low-use customers who use a disproportionate amount of electricity during times of peak demand. It sends the wrong price message to customers.”
The narrative is changing in California. But that is no surprise, as it changed in other places around the globe that have deployed smart meters and then later mandated time of use rates.
I questioned the Public Service Commission back in May 2012 on smart meter deployment asking “FP&L states we can have access to our usage on a continually basis. … The only time this becomes important information, as a consumer to have, is when you move to pricing based on “time of day usage”. Is this where we are heading with this “smart grid” and if so shouldn’t the public be alerted now?”
Walter Clemence responded in an e-mail on June 6, 2012 as follows:
“Will time-of-use rates become mandatory after smart meters are deployed?
Time-of-use rates are optional and customers may continue to take service under their current rate schedule. Customers have had the option of time-of-use rates since 1974. “
Pay close attention to the words he used. He did not say that there were “no plans to move to TOU pricing”. And in fairness, California is letting those that want to stay on flat rate pricing do so. But as smart consumers know, that with nearly 20% rise in rates, eventually good comrades do what the State demands. They comply.
Google “smart meters and dynamic pricing” and see what you find. There is a 10-year audit trail on their plans to move everyone to dynamic pricing and change behaviors through pricing. And just for the record, TOU pricing is just an interim step; the ultimate goal is “real time” pricing (RTP). This is a staged implementation for a reason. It’s like the frog. Put him in boiling water and he will jump out. Put him in cold water and gradually turn up the heat and he stays there until he can no longer get out.
Skeptics (pro-smart grid) will argue changing consumer behavior is essential and they will talk about the overloaded grid. But the forecast for electricity load growth tells a different story. Check out this Lawrence Berkeley National Laboratory, July 23, 2013 presentation to the National Association of Regulatory Utility Commissioners (NARUC). Electricity Load Growth is expected to decline.
Source: July 23, 2013, Utility Business Models in a Low Load Growth/High DG Future, Charles Goldman, Andy Satchwell, and Peter Cappers, Lawrence Berkeley National Laboratory
What’s in store for Florida? Can all its seniors handle staying up until 7:00 p.m. to do their laundry? Perhaps they will offer senior special discounts so they can afford to run the air conditioners during those hot summer afternoons. The rest of us will pay or sweat.
EDITORS NOTE: TOU means that instead of a single flat rate for energy use, time-of-use rates are higher when electric demand is higher. This means when you use energy is just as important as how much you use. To learn more about time of use rates watch this video from Pacific Gas & Electric: