37 comments on How Smart is Ontario's Smart Metering Plan?
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37 comments on How Smart is Ontario's Smart Metering Plan?
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The utilities' costs vary with demand, and if you don't pass that variability on to the individual customers, but rather have a fixed per-KWH rate, then in effect the customers that are careful not to use much during peak times are subsidizing those who leave their air conditioners on on summer afternoons or choose to heat with resistive electric heat during cold snaps. Making the variable costs fair and transparent thus seems like a good idea to me.
The issue of how will low-income people cope is a separate one. (The same arguments arise when talking about gasoline taxes.) As energy prices increase in the future, they will be hit hard in any case. If TPTB cared about the poor then they should invest more money in programs that help them insulate and convert away from electric heat. Landlords should be required to make rental housing satisfy certain energy efficiency standards, with money being made available to the landlords in loans to help them finance the needed changes. Even if those loan payments are then passed on to the renters in higher rents, the renters will still save money in the long run due to lower utility bills.
Looking forward to Part II
I agree that the problem of the less well off is, or should be, a separate issue. Electricity billing and social welfare have been intertwined for a long time, which has led to price signals becoming muted and confused. I was merely pointing out that, within the confines of the current system, political action represents a balance between conflicting factors. It would be political suicide to raise peak rates high enough to provide a real financial incentive to load-shift, hence the balancing act that will please no one.
The solution IMO is to sharpen price signals through real-time feedback and billing innovations which eliminate the effects of amalgamation and delay. There are already tried and tested systems in place which do this, and they work because they are smart in a human sense, rather than only being smart in a technological sense. In combination with time-of-use pricing, these methods could be used to turn a blunt instrument into a precision instrument. Both the problems of the need for social considerations and the need for load-shifting can be addressed in such a way that they do not poltically confound one another. For details, see Part II.
The last party at the helm declared themselves free marketeers and set up a pool pricing system for electricity. Pool prices rose quickly (to about 8 cents/kWh), whereupon the government promptly slapped a cap on rates at a level so low that consumption was being actively subsidized - and this after only a four months trial period for floating prices (when it had been obvious prices would rise as supply was tight).
The present administration raised the rate cap (because the subsidy was costing the province a fortune) and introduced a tiered payment system. They declared that the bad old days of Ontario Hydro (which had accumulated some $40 billion in debt) were over, then promptly set up an even more centralized bureaucracy. If its Standard Offer Contract is anything to go by, it seems to be determined to micromanage everything in such as way as to impose completely unnecessary cost burdens on those trying to introduce alternative generation, particularly at small-scale. The metering program also imposes unnecessary costs, largely due to the political requirement for two-way communcation and critical call capability.