Lee Greenberg, Canwest News Service
Gord Miller, Environmental Commissioner of Ontario, says millions of so-called smart meters will be useless unless the government changes course and sets a sufficiently low hydro rate to convince people to do their laundry and dishes at night and on weekends.
Rate increases announced this week show a “disturbing” move in the opposite direction, Mr. Miller said.
Off-peak power rates jumped 20%, disproportionately high compared to peak daytime rates.
The increase means peak rates are now only 1.9 times greater than off-peak rates (which run from 9 p.m. to 7 a.m. and throughout weekends).
To successfully persuade people to change their behaviour, Mr. Miller said, off-peak should be three to five times less expensive.
“I’m watching this very closely because I don’t think this is enough,” he said. “I don’t think people will change because there is not enough incentive.”
The smart-meter initiative, which involves the installation of 3.6 million of the devices by the end of 2011, has been a focal point in the government’s energy-conservation plan since 2004. The meters, which cost an average of $161 per unit, allow local utilities to gauge not only how much, but when power is used in homes.
The intention was to offer a financial reward to residential customers who shifted their consumption to nighttime, when they would not compete with business customers.
Energy policy expert Mark Winfield, a professor at York University, agreed with Mr. Miller.
“It sends a potentially contradictory signal,” he said.
A 2007 trial in Ottawa found 375 households saved an average of just $1.44 per month through time-of-use pricing when peak rates were three times as expensive as off-peak.
If those results are transposed onto the current hydro-rate landscape, where the incentive is considerably diminished, the results will be even more lacklustre.
“The magnitude of the reward isn’t enough to make this successful,” Mr. Miller said.
The government pegs the cost of the smart meters at $1-billion. Other observers, such as consultant Tom Adams, say the cost is closer to $2-billion.
Energy Minister Brad Duguid said he is open to “tweaking” the time-of-use rates.
“It’s a work in progress,” he said. “I’m not going to conclude this is a success or failure until it’s had some time to work its way in.”
Under the new rates announced this week, peak pricing will be 9.9¢ a kw/h beginning on May 1. The off-peak price will be 5.3¢ a kw/h. The Ontario Energy Board, responsible for setting the prices, said the increase will add $7.60 — or 8% — to the average monthly hydro bill.
The increased prices reflect the higher costs of new power coming online, including a raft of solar and wind projects that will cost considerably more than the market electricity price.