INDEPTH: ENERGY
Smart meters: FAQs
CBC News Online | November 3, 2005
The Ontario government introduced legislation on Nov. 3, 2005 to start the process of getting "smart meters" into every home and small business in the province by 2010. In the first phase, meters will be installed on 800,000 homes, mainly in urban areas, by 2007.
The province says smart meters provide consumers with greater control over energy costs that can lead to system-wide savings through reduced demands in peak hours.
What is an electricity meter?
It's that box on the side of your house that contains a spinning wheel and a few clock-like dials that are pretty tough to decipher, and it measures electricity use in your house.
Somebody comes by every month or two and reads the meter. A few days later, you get your bill.
What is a smart meter?
A smart meter allows your local electricity distributor to track how much electricity you used and, more importantly, what time of day you used it. The goal is to raise awareness about the cost of power and encourage consumers to reduce electricity use during times when the price is high.
Smart meters have two-way communication capability, so your local electricity distributor will be able to retrieve billing information automatically, eliminating the need for a flesh-and-blood meter reader.
Ontario's former energy minister, Dwight Duncan, compared the system for measuring electricity consumption that's currently used almost exclusively to driving a car without a fuel gauge and buying gas without knowing how much it costs.
"You don't know how much you buy when you buy the fuel or at what price," Duncan told an Ontario Energy Association conference in April 2005. "You then receive a bill from the gas company once a month or every second month with an estimate of how much you bought. This estimate may be based on a reading or may be based on an estimate of what you bought at the same time last year. Smart meters are the gas gauge and the price billboard that enable consumers to make buying decisions and lifestyle choices."
What else can smart meters do?
While not endless, the possibilities are many. Besides allowing you to figure out the most economical time to run your dishwasher, a smart meter could allow you to sell surplus electricity back to the grid. That's handy, if your home uses solar panels to help meet some of your electricity needs. A long sunny spell might result in extra power during parts of the day, and you could sell that power and reduce your electricity bill.
A smart meter may also allow your power distributor to disconnect or reconnect your home to the grid remotely. It could also allow for the integration of your gas- and water-use readings.
How can a smart meter save money?
The price of electricity is rapidly rising in much of the country. Where it's not, price increases are being held in check by government subsidies. Your electricity bills will probably still rise with a smart meter.
Smart meters bring the notion of comparison shopping to electricity - there is a financial incentive to shift your power use away from periods of peak demand. Ontario has been especially susceptible to fluctuations in the electricity market in recent years. Demand has surged to record levels - beyond what the system has been able to produce at times. When demand rises that high, power has been imported, usually at a much higher price than consumers are charged.
As of Nov. 3, 2005, people using regular meters in Ontario were charged five cents per kilowatt hour of power used, for the first 750 kWh. Beyond that, the price is 5.8 cents per kWh.
People with smart meters are charged a sliding scale of rates based on the time of day power is used. The prices range from a high of 9.3 cents per kWh to a low of 2.9 cents per kWh. It would cost much less to use major appliances after 10 p.m. In the summer, it would make sense to use the air conditioner less during the afternoon. Holding off until the weekend to do laundry would also save money.
Ontario smart meter pricing chart (in effect until April 1, 2006):
| Day of the Week | Time | Time-of-Use | Price(cents/kWh) |
|---|
| Weekends & holidays | All day | Off-peak | 2.9 |
Summer Weekdays
(May 1 - Oct 31) | 7 a.m. to 11 a.m. | Mid-peak | 6.4 |
| 11 a.m. to 5 p.m. | On-peak | 9.3 |
| 5 p.m. to 10 p.m. | Mid-peak | 6.4 |
| 10 p.m. to 7 a.m. | Off-peak | 2.9 |
Winter Weekdays
(Nov 1 - Apr 30) | 7 a.m. to 11 a.m. | On-peak | 9.3 |
| 11 a.m. to 5 p.m. | Mid-peak | 6.4 |
| 5 p.m. to 8 p.m. | On-peak | 9.3 |
| 8 p.m. to 10 p.m. | Mid-peak | 6.4 |
| 10 p.m. to 7 a.m. | Off-peak | 2.9 |
| Source: Ontario Energy Board |
Is Ontario the only jurisdiction switching to smart meters?
On such a big scale? Yes. But they're also being tried in several other areas.
In Alberta, about 500 residents of Drumheller and Grande Prairie are taking part in a pilot project to see if smart meters help reduce energy use. It's the first such experiment in Western Canada. An earlier trial in Woodstock, Ont., found the average participant cut electricity use by 15 per cent.
How much do smart meters cost?
Depends on their features. But a good bet is about $500.
The Ontario Energy Board says costs will be recovered from consumers over time. The board expects it to cost more than $1 billion to install the meters across the province. That should add between one and four dollars a month to the average electricity bill.
Are there potential problems with a system of smart meters?
No way. Computers don't make mistakes.
Seriously, there are some potential pitfalls. For instance, there are several types of smart meters available. Since electricity is usually regulated by the provinces, each province would have to develop standards to make sure that meters meet the requirements of its regulatory system. A patchwork of incompatible technologies that lack a common communication platform would increase the potential for problems.
There can be other issues as well. For instance, if you are confined to your home because of medical needs and require air conditioning, should you be forced to pay high prices during periods of peak demand in the summer?
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