Imagine a system of travel where you had no idea of the cost until the trip was over and you were back at home, waiting for a bill in the mail. You’d drive cross-country and stop periodically to fill up the tank, without any signs posting the cost per gallon. Or, you’d show up at the airport and get on the next available flight, not knowing if you were paying a first class fare or a Priceline discount.
Of course, it sounds ludicrous. But that’s exactly the system consumers deal with every month when paying their home power bills. We all have some sort of vague sense that our bills will be higher during certain peak summer and winter months. But we rarely track our actual usage in any reliable way, like kilowatt-hours. Even if we do, there’s still that wildcard of so-called peak demand periods, when unit costs spike along with usage.
CEA recently highlighted the rise in smart meters, a long-overdue technology that would take a lot of the guesswork out of measuring home power costs. Now, with record high temperatures sweeping the country and power costs on everyone’s mind, we wondered if most people have any idea how much of a premium they pay for power during peak demand periods, like heat waves.
According to some studies, power consumed in peak periods costs close to three times as it does in off-peak times. But because we almost never know the precise price we are paying at any given time, we are unable to make informed choices about turning the thermostat up or down.
A recent NPR story illustrated just how variable our power costs can be when a guest explained that 10% to 20% of the overall electricity costs in the U.S. come from the top 100 hours of demand. In the same way that a small portion of first-class business travelers booking travel at the last minute pay substantially more than their coach counterparts, power customers pay a lot, lot more if they wish to dry their hair, or cook dinner, or simply cool the house down during peak demand periods. The only difference being that the power customers don’t even know how much they are paying until the bill arrives in the mail at the end of the month. (And they don’t get a complimentary cocktail.)
A number of high-tech startups have been working on systems that would deliver consumers the information they need to make informed decisions about plugging in so-to speak. One of them, eMeter, recently chose what felt like the hottest day of the year to announce it had secured venture capital funding to expand its business. The company makes smart meters to deliver more information about consumption and costs directly to consumers and has even briefed President Obama on its home energy management technology.
While individual consumers who use this kind of up-and-coming technology stand to achieve major savings, it’s important to note that even when just a small portion of consumers become more vigilant about when they use power, everybody wins. Studies show that even small reductions of 10% or less in peak power consumption would eliminate tens of billions of dollars of power generation costs.