The Hour of Power

The Washington Post today reports various utilities are experimenting with peak-hour pricing for electricity.

The utilities use “smart meters” to report energy use in 15-minute segments and e-mail and text messages to alert customers that local power use is peaking.

That’s a great idea, it’s an example of how we can use relatively unsophisticated computer programs to save power, save money and cut pollution.

Some utilities are offering power at discount rates at off-peak times, which also makes sense. Do the laundry, take a shower, dry your hair at 10 p.m. rather than 7 a.m. or 5 p.m., take advantage of efficiencies in the system and be rewarded for it. The discount would be something on the order of nine cents per kilowatt hour, instead of the normal 11 cents per kilowatt hour.

Some utilities, on the other hand, want to charge premium rates (81 cents to $1.30 per kilowatt hour) for using electricity in peak time.

This is where I lose patience with utilities. Theirs is a business that strictly adheres to the law of supply and demand. There are opportunities for efficiency and inefficiency within each utility and some people (engineers, I suspect) figure out ways to make the system work better (discounts for off-peak use). Other people (accountants, I suspect) figure out ways to gouge consumers when they’re most vulnerable (premium prices when you’re trying to get a hot breakfast into the kids).

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