The opposition parties started complaining yesterday after it was discovered that studies are showing that Smart Meters have caused most households to spend more on electricity, rather than less. NDP leader Andrea Horwath ranted:
”Here we have a system that’s costing us $1 billion and people aren’t getting the benefit in cost savings and they’re not getting the benefit in conservation. It’s a complete failure.”
And apparently Progressive Conservative Leader Tim Hudak “literally laughed out loud” at the idea that Smart Meters were saving people money. He’s even promised that, if elected, his party would end the program.
But here’s the thing… Smart Meters were never intended to save everyone money. In fact, they literally cannot save everybody money.
Don’t believe me? Lets consider:
Smart meters allow the system to keep a record of when electricity is being used, in addition to how much. So you can see that you used x amount of electricity between 7am and 12pm, for example. Because of that, the utility company can reliably set up a tiered system that charges you more for electricity during peak times, and less during off-peak times. And your bill can be broken down to show exactly what you used, and when. It’s an incentive-based program; the incentive being the high price associated with peak periods.
The idea is that when you see how much it costs to use electricity during peak times, you will make the effort to change your own habits, so that you use less when it is more expensive and more when it is less expensive.
The key here is that it is up to the consumers to make sure that they change their own habits. If you don’t change your usage to take advantage of the system, then not only will you not save money, you will likely spend even more money.
So all the people who saw a rise in costs associated with the Smart Meter program simply did not use it to their own advantage – they didn’t change their habits. They might believe that they have all sorts of good reasons for not changing their habits, but the bottom line is that the choice was theirs to make – and they chose convenience over cost.
But this isn’t unexpected. The government knew well ahead of time that this would be the case. In fact, the Smart Meter system relies on the presumption that most people will not change their habits.
Think about it: the system assigns costs based on so-called peak and off-peak periods. Lets say for simplicity that early in the morning and late at night are the off-peak period, and the middle of the day is the peak period. The program was designed to give an incentive for people to use more during the early morning or late at night.
But if everyone actually switched their habits, then the morning and night would become the new peak period. It doesn’t cost the utility more to create electricity during the day, it simply charges you more during times when there is the highest demand. So if everyone started demanding more during what was originally labeled an off-peak period, it wouldn’t be an off-peak period anymore, would it?
The system presumes that there will always be more people willing to accept the cost as a matter of convenience, and rewards people who make an effort to change their habits.
It is disappointing that our politicians are not able to, or not willing to, understand this.