Ontario engineers propose ‘smart’ time-of-use tariffs for smart meters


John Schindler,
President & Chair,
Toronto, ON, Canada — (METERING.COM) — March 24, 2011 – The Ontario Society of Professional Engineers (OSPE) has put forward a proposal to the Ontario Energy Board (OEB) to use smart meter data in a smart way to set electricity prices for time-of-use regulated price plan (TOU-RPP) customers.
Under the current TOU policy and methodology TOU-RPP customers pay the higher mid-peak and on-peak rates for all electricity used during the corresponding periods, regardless of their total consumption.

Under the modified methodology proposed by the OSPE, these customers would enjoy a base rate for all base load electricity consumption, 24 hours a day, 7 days a week. Then any consumption beyond that would then be charged at the on-peak and mid-peak prices during the corresponding hours of the weekday. The base rate could then be set at the true cost of providing base load electricity, which is much cheaper than peak load electricity.
“Smart meter data contains sufficient intelligence for utility billing software to allow base load customers who do not contribute to the system peak load to enjoy lower electricity prices,” says John Schindler, OSPE president and chair. “It is inherently unfair for these customers to be charged on-peak rates for their base load electricity if they don’t contribute to the system peak.”

The OSPE believes that the greater fairness provided by the rate would encourage customers to embrace conservation, energy efficiency and peak load reduction. It would also spur consumers to consider strategies such as investing in gas-powered appliances and thermal storage systems for their space heating and cooling needs.

Customers who successfully flatten their electrical consumption load profile should be able to escape the financial burden of peak prices, believes the OSPE. They can also help to ensure more efficient utilization of Ontario’s electrical infrastructure.