The following post is from contributing author Laurel Gray.
Variable electricity rates may be coming to your neighborhood in the near future. Nationwide, many utility companies are rolling out “smart meter” programs that are designed to measure and report their customers’ usage throughout the day. The goals of such smart grid systems are to better track demand and usage and also enlist consumers’ help in reducing demand on the system during peak hours.
In some places, smart meter programs are voluntary and in others participation is mandatory. Even if your state or area is not talking about smart meters yet, the writing is on the wall. According to the The Edison Foundation’s Institute for Electric Efficiency, by the end of the decade there could be as many as 65 million smart meters in use nationwide.
Even though smart grid programs may start out only tracking peak-hour usage, you can bet that eventually these programs will aim to reduce overall peak-hour usage by charging more for electricity during high-demand periods. According to a New York Times article:
“Using digital technology and computer networking, smart meters can transmit real-time data that is supposed to enable utilities to conserve electricity and better allocate power during parts of the day when overall demand is high. Utilities can also then vary the price for power, by time of day or time of year, based on when it is being used; some are already offering this option to customers.”
One way to charge more for power based on time of day is with a time-of-use (TOU) meter. A TOU meter charges customers a higher rate for designated peak hours and a reduced rate for off-peak hours. Conversion to a TOU meter can be a good idea for consumers who are aware of the rules and are able to alter their consumption patterns to maximize plan benefits.
Outside the U.S., it’s not uncommon for utility companies to charge more per kilowatt hour during high-demand periods. In Costa Rica where I live, customers have the option to install a smart meter that charges different rates for peak, valley, and nighttime usage.
While the peak rate is more than double the rate charged to customers with the old-fashioned meters, the valley rate is 9% cheaper than the standard rate and the nighttime rate is a whopping 63% cheaper.
We decided to switch to the new meter and to try to modify our consumption to align with off-peak hours. By running the dishwasher, washing machine and clothes dryer only after 8 p.m., we were able to lower our overall monthly bill while still consuming roughly the same number of kilowatt hours.
Appliance Timers vs. Energy Hogging Appliances
Even though we modified our behavior to lower our bill, we still had too many kilowatt hours during the peak period. So the next step was to modify the behavior of our appliances. Figuring that the refrigerator was probably the biggest peak-hour energy hog in the house, my frugal husband went online to research appliance timers.
Appliance timers are relatively inexpensive (models on Amazon range from $10-20) and range from simple mechanical units with a single stop-start function, to more sophisticated digital models with multiple on and off settings that can be programmed by the day or week.
The model we use was actually marketed as an aquarium timer. We set it to turn the refrigerator off during the costly peak hours between 10 a.m.-12 p.m. and between 5:30 – 8 p.m. During each power-off interval, we set the timer to turn the refrigerator back on for 15 minutes to ensure that the temperature inside stays low.
Keeping the fridge off during the spike period made a measurable drop in our peak kilowatt hour usage, and knocked our bill down another few dollars per month.
Think Outside the (Ice) Box
Even if your region is not transitioning to a smart meter system, appliance timers can quickly pay for themselves. While the refrigerator is the most obvious candidate for an appliance timer, consider using a timer on any electrical device that is running (or even just plugged in) when no one is home or when not in use.
Items such as printers and other office equipment, kitchen appliances, heating and cooling devices, hot water heaters, and aquariums can all be placed on timers to help save on electric bills.