Public Power - May 2008 - (Page 21)

The more customers understand time-of-use rates, the higher the acceptance, said Newmarket Hydro President Paul Ferguson. “You can’t talk about it enough.” the critical peak pricing charge, off-peak prices were reduced by four-tenths (0.4) of a cent. Consequently, prices ranged from 3.1 cents/kWh to 30 cents/kWh, or a criticalpeak to off-peak price ratio of 10 to 1. Critical peak events were triggered by thresholds based on temperature or humidity readings. In winter a temperature of -14° Celsius (-57.2˚ Fahrenheit) or more triggered an event, and during the summer a temperature of 28˚ Celsius (82.4˚ Fahrenheit) or more triggered an event. Customers were notified by 5 p.m. the day before an event via automated phone calling, e-mail, or text messages. The critical peak rebate plan is similar to critical peak pricing plan, but instead of higher peak prices, customers received a 30 cents/kWh rebate for reducing consumption during critical events. Also, there was no off-peak price reduction. The rebates were calculated using an estimate of customer baseline consumption. The Ontario Energy Board has not yet decided whether the critical peak pricing or critical peak rebate features will be part of the overall mandatory TOU pricing plan. The reductions in consumption during the summer-peak periods ranged from 2.4 percent for customers on the TOU pricing-only plan to 11.9 percent for those on TOU plus the critical peak pricing plan. Among customers in the critical peak pricing group, consumption dropped 25.4 percent during critical peak events, versus 5.4 percent for customers on TOU pricing only. As would be expected, the 30 cents/kWh motivated customers to reduce their electricity consumption. www.APPAnet.org Electricity use for all groups declined 6 percent. Customers on the critical peak pricing plan reduced overall consumption by about 5 percent while those on the critical peak rebate plan reduced consumption by about 7 percent. Customers on the TOU pricing only plan reduced consumption 6 percent. Overall, customers benefited from the TOU pricing. Electricity bills declined for most customers—75 percent of the participants paid less due to shifting consumption alone than they would have under the nonTOU pricing structure, while 25 percent paid more. Since customers also reduced their overall electricity consumption, 93 percent of the participants paid less and saved an average of $4.17 each month once conservation was taken into account. Average monthly savings for customers on the TOU pricing plans were $1.44. Customers with the greatest savings paid bills that were $19.52 below non-TOU levels, while those with higher bills paid an average of $5.91 more. However, the study may have understated the load reductions and savings from TOU pricing. Although participants were invited on a random basis, subsequent decisions by customers to participate involved some degree of self-selection. Hence, those who chose to participate are likely to be Two-Tier Rate Plan (in use now, to be replaced by time-of-use rates by 2010) May-October 600 kWh, 5.9 cents November-April 1,000 kWh, 5.9 cents spondents said they would recommend TOU pricing to their friends while only 6 percent said they would not. Customers liked the plan because it made them aware of electricity costs and enabled them to manage costs. Others emphasized the environmental benefits. Most participants were satisfied with the three time periods and found the price differences between the periods large enough to encourage them to change their consumption habits. Customers liked the graphic summary of daily usage included in their monthly statements. They also liked refrigerator magnets that provided a convenient reminder of on- and off-peak periods. Participants who were unsure about the plan or who would not recommend it said TOU pricing entailed too much effort or offered insufficient savings. Many who liked it said they would change their behavior to fit “The reductions in consumption during the summerpeak periods ranged from 2.4 percent for customers on the TOU pricing-only plan to 11.9 percent for those on TOU plus the critical peak pricing plan.” more concerned about managing their energy consumption and willing to conserve. Consequently, the TOU groups had disproportionate numbers (compared to the overall population) of participants who were likely already taking steps to manage their consumption. Measured benefits from a truly random group of customers might have been larger. The Ontario Energy Board used focus groups and surveys to gauge customer satisfaction with the various TOU pricing plans. Seventy-eight percent of the rethe reality of electricity costs in the hope that this would result in lower overall prices in the future. Some telling comments from the focus groups Ontario Energy Board used to assess TOU pricing were: “…You’re in control of your usage. It puts the power back in your hands.” “It is making me think before I turn something on, giving me the decision on my bill.” “[TOU pricing] is not about ‘what’ you use, it’s about ‘when’ you use it.” MAY 2008 21 http://www.APPAnet.org

Table of Contents Feed for the Digital Edition of Public Power - May 2008

Public Power - May 2008 Contents Perspective LEEDing the Way Ontario Moves to Mandatory Time-of-Use Pricing Journey to the Smart Grid Right-Sizing Transformers Energy Audits for Large Industries Economic Development Community Broadband Reliability Hometown Connections Parting Shot

Public Power - May 2008

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