Four Ontario utilities report on TOU pricing pilots


Toronto, ON, Canada — (METERING.COM) — June 3, 2008 – Four Ontario utilities, Newmarket Hydro, Oakville Hydro, Veridian Connections and Hydro One Networks, have submitted reports discussing the results of their time-of-use (TOU) pricing pilot projects across a range of customer classes.

Newmarket Hydro
Newmarket Hydro’s pilot, undertaken from August 2006 through October 2007, was aimed to test residential customer response to TOU rates alone and in combination with a remotely controllable thermostat and demand response incentive (i.e. critical peak rebate), and involved approximately 250 customers with average monthly consumption of 750 kWh.

Under the TOU rates on-peak usage decreased by 0.4 percent and mid-peak consumption decreased by 0.3 percent, while off-peak consumption increased by 0.7 percent, with most of this increase occurring during the weekday off-peak period. The participants with remotely controllable thermostats also exhibited greater reductions during critical peak periods than those without, reducing their consumption (and average demand) by approximately 31 percent (0.35 kW/customer) during the two critical peak periods when their thermostats were controlled remotely. Additionally, the remote control feature enabled these participants to provide a significant response even under “day of” notification, achieving a 21 percent (0.23 kW/customer) reduction in their consumption over the critical peak period.

On average the TOU prices resulted in slightly higher (just under 2 percent) commodity charges for participants, but with wide variations, with just over one-third of participants paying lower commodity charges.

Just over two-thirds of the participants said they would recommend the TOU pricing plan to their friends, while a quarter were not sure whether they would recommend it. Some of the reasons given included not knowing if they were actually saving money on their monthly bills since switching to TOU prices and the lack of incentives given to consumers to encourage them to shift their electricity consumption away from on-peak consumption.

Oakville Hydro
Oakville Hydro’s pilot, undertaken from January 2006 through October 2007, was aimed to test the response of condominium residents in three buildings to a change from bulk metering to individual metering with tiered pricing and subsequently to TOU rates. A small number of participants in one of the three buildings were also provided with a water heater load control device.
In the change from bulk metering to individual metering with TOU rates, in one of the buildings (and generally representative of the other two) the average consumption for each unit went from about 700 kWh per month to about 550 kWh per month, while commodity costs decreased from $37 per month to $30 per month, corresponding to 22 and 20 percent reductions respectively. Moreover the reduction in consumption was spread more or less evenly over the three TOU pricing periods (on-peak, mid-peak and off-peak). The participants with timers on their water heaters also exhibited a significant shift of consumption from on-peak and mid-peak periods to off-peak periods.

There were also marginal differences between the tiered and TOU pricing and based on a simple average across all three buildings, under TOU pricing on-peak usage increased marginally by 0.5 percent of overall consumption, while mid-peak consumption decreased by 2 percent.

Veridian Connections
Veridian Connections’ pilot, undertaken from February through September 2007, was aimed to test the response of mid-size to large general service customers (>200 kW peak demand) to TOU rates and involved 38 of the 46 eligible customers, comprised almost entirely of multi-residential (with bulk metering) and municipalities, universities, schools and hospitals (MUSH) customers.

These two customer segments exhibited different responses to and experienced different impacts from TOU prices, with the multi-residential participants decreasing their consumption by an average 2.8 percent under TOU prices and the MUSH participants decreasing their consumption by only 0.1 percent. However, due to the differences between the TOU and the previous tiered rates, while the multi-residential participants experienced a 1 percent increase in unit commodity charge, the MUSH participants experienced an average 10 percent reduction in unit commodity charge.

Hydro One Networks
Hydro One Networks’ pilot, undertaken from May through September 2007, was aimed to test the response of small customers (<50 kW) to TOU pricing and involved 500 residential, farm and small general service customers. These customers are mostly rural-based and have higher electricity usage due to great reliance on electric equipment such as electric space and water heating.

Participants were responsive to the TOU rates and in the summer months the load shifting impact averaged 3.7 percent and the conservation impact averaged 3.3 percent. The customers with real time in-home displays responded even more, with an average load shifting impact of 5.5 percent – rising to 8.5 percent on a hot summer day (over 30°C) – and conservation impact of 7.6 percent. Extrapolating these results to all Hydro One residential customers would yield a summer peak load shifting impact of about 150 MW.

As a result of this load shifting under the TOU rates three quarters of the participants paid a lower electricity bill, with customers who were better off gaining on average $23 during the pilot (about $6 per month), while customers who were worse off on average lost $7 (less than $2 per month).

Almost three-quarters of the participants indicated that they would like to remain on the TOU rates, and 87 percent claimed they changed their behavior during the pilot, while only 4 percent found the changes in their daily activities to be inconvenient. In addition two-thirds of the participants with an in-home display found it useful to help them conserve electricity and on average customers thought they would save 9 percent on electricity consumption by using the display.