Will Smart Meters Cause my Electricity ("Hydro") Bill to Increase?
(Just want to see the rates and not the commentary? Scroll to the bottom!)
Toronto (and other places in Ontario) are moving to "smart meters" for electricity billing, where you pay a different rate depending on the time of day. This makes sense, as the cost of electricity does vary throughout the day, and there's currently no incentive for people to do things like cook a lunch or vacuum their house at 2AM instead of 2PM. Now, with smart meters, you can save yourself a few nickels by waking up in the middle of the night to do these already enjoyable chores!
In theory, with smart meters, if users don't change their habits, the amount of electricity sold and it's price should not change at all. If the overall amount that the average user pays for electricity increases with time-of-day billing smart meters, then there's a stealth price increase taking place. Of course, I'm talking about averages here, you may be above or below it.
In theory, the change to smart meters should be revenue neutral at worst, and at best, decrease electricity revenue and increase electricity use, as people use more "cheap" electricity, and less "expensive" electricity.
The utilities will be sure to charge you for installing all of these smart meters of course, so you have to make enough changes in your lifestyles to counter-act this to end up saving money. I think that the cost of something represents how scarce that good is, and installing all these meters does use resources
It should be said that some small users have no chance of making enough changes to offset the cost of the meters themselves, and end up using more resources than they did before
What's the Real Price of Electricity Anyway?
The "Independent Electricity System Operator" determines the price in Ontario every 5 minutes based on supply and demand. You can see the current hourly rate here. On average, you should be paying this rate through the smart-meter. Maybe one day they'll configure the smart meters to actually charge the real-time rate, but that'll confuse people, and the backlash for paying the actual cost of something would be incredible.
An interesting aside is that electricity prices in Ontario have
actually dropped significantly over the past year, due to
industrial decline, but also mild seasons and changing energy use patterns. Examples of these changes include changing from
incandescent lights to CFLs, tower PCs to laptops and CRT TVs to LCD
TVs, all of which reduce electricity demand (and as a result, price)
substantially. Appliances have steadily improved in efficiency, and those old refrigerators and such are now finally getting sent to the recyclers.
For the first week of June, the average weighted price of electricity generation in Ontario has been just above 1 cent/kwh.
Here are the average real monthly prices for electricity over the past year in Ontario:
(In other words, these are the amounts paid to electricity generators, like Ontario Power Generation)
An electricity crisis? Not a chance, not in Ontario, prices are actually trending down and set 7-year record lows in April 2009. Other costs that aren't included, like "distribution", "transmission" and "service charges" aren't included here and may be going up or down.
I'd also like to point out that electricity users are paying for the real price of electricity, it is not subsidized, but it was before, and current users are paying back for it (Debt Retirement Charge), so it's actually the opposite of subsidized.
Here are the old summer electricity rates that residential users without activated smart meters pay:
5.7 ¢/kWh for the first 600 kWh in a month
6.6 ¢/kWh for each additional kWh
Of course, this is only the cost for the electricity, excluded are transmission charges, distribution charges,
Here are the new "Smart-Meter" summer electricity rates for Toronto (and the rest of Ontario):
Week-ends and holidays: 4.2 ¢/kWh
|7 am to 11 am||7.6¢/kWh|
|11 am to 5 pm||9.1¢/kWh|
|5 pm to 10 pm||7.6¢/kWh|
|10 pm to 7 am||4.2¢/kWh|
Conclusions on Smart Meters and Ontario Electricity Pricing
To be honest, based on my gut instinct, I'm calling this a (temporary) stealth price increase. It may very well be a total price increase if one's electricity consumption isn't sufficiently shifted to cover the costs of the meters themselves, which is especially true for light users (like cottagers). Many of the biggest electricity loads run during peak or mid-peak times and are almost impossible to shift, such as air conditioning, TVs, PCs, hot water usage and cooking. Most people aren't going to shift cooking dinner from 6:00PM to 10:00PM. Now there's actually less incentive to turn off that PC overnight. The only thing I think people will do is change the timing of their laundry and pool pumps, and really, during those really hot days of the year (when electricity is the most expensive), you should be drying outdoors anyway. It takes a load off your air conditioner too.
I'll bet that the Ontario Energy Board will lower these rates at their next review, since Ontarians will be overpaying for electricity with these rates.