Saturday, August 25, 2007


No, this isn't about George Bush; it's about Victoria forcing electricity consumers to use "smart power". The Victorian government's smart meter plan is just a wee bit controversial:
In Victoria, the meters will soon become compulsory, replacing what Energy Minister Peter Batchelor describes as "100-year-old technology".

"We're going to roll out over a four-year period in excess of 2.4 million new meters in each home and business right across the state," he said.

But across the border, South Australian Energy Minister Pat Conlon is scathing about their use.

"If you want a policy outcome where we kill the elderly in droves during heat waves, this is what you do," he said.

Mr Conlon believes charging extremely high prices for using appliances like air conditioners at times of peak demand will only punish poor people.

"Anyone who will switch off will be low-income people. In South Australia, a large number of those are the elderly," he said.

"I don't think anyone wants a policy that during very high temperatures convinces older people to turn their air-conditioning off. That would be extremely dangerous."

Mr Batchelor disagrees.

"That's nonsense. In Victoria, we no longer believe that the earth is flat," he said.

"I envisage that once the smart meter roll-out has been completed there'll be a range of pricing packages that will include time-of-day pricing.

"But I also think the retailers will continue with the traditional flat rate charging for those that don't want to avail themselves of this opportunity."
Gee, it's not every day that one state Labor Minister another state Labor Minister of trying to kill the elderly. Here's some background.

Smart power is a scheme whereby smart meters record not only how much electricity is used but when it is used, with different rates applying for different periods of the day. In Western Australia the current 24/7 flat rate for electricity (the rate coming into effect in October) is 13.94 cents per unit (kWh). Smart meter users do not pay the flat rate, with weekdays divided into peak, shoulder and off-peak periods (these periods varying somewhat for summer and winter): peak rate, 25.28 cents/kWh; shoulder, 15.42 cents/kWh; and off-peak, 7.22 cents/kWh. Over weekends smart power rates are always lower than peak: weekend day rate, 11.32 cents/kWh and off-peak, 7.22 cents/kWh.

Smart meter users able to shift time of consumption to the off-peak period -- locked in every day from 9:00 pm to 7:00 am in winter and from 10:00 pm to 8:00 am in summer -- and to weekends can save lots of money. Those who can't are going to see their power bills go up. Synergy, Western Australia's electricity supplier, points out smart power's potential savings like this (my emphasis):
SmartPower can help you reduce your electricity bill if you're not at home using electricity during the day on weekdays, or if you can shift your usage to between 9pm and 7am weekdays or to anytime on the weekend.

The amount you can save all depends on your ability to shift your electrical usage to the cheaper off-peak times.

Try using these and other appliances in off-peak periods to save your money:

Electric water heaters*
Reticulation bore pumps*
Swimming pool pumps*
Washing machines
Clothes dryers
Bread Makers

*You may need to have a timer fitted by a licenced electrician.
Synergy has recently given added incentive for smart power users to avoid peak periods by making peak usage even more expensive: under the old rates, peak usage cost 3 times as much as off-peak; under the new rates peak costs 3.5 times as much as off-peak.

Over the years smart power has saved me lots of money. I've managed to shift around 60% of electricity use to off-peak with only 15% of usage during the peak period. Not everyone will find this convenient or even practical, however. The elderly and those with young families may not be able to shift power use until late at night: what's the point of having heating and cooling if it's too expensive to use during the day; and is it really practical for a young mother to do her washing late at night or to save it up laundry for batch washing at weekends. Business too will be greatly affected, with their hours of operation largely falling within peak periods.

It is unclear who is going to pay for the meters. In Western Australia Synergy charges $165 to retrofit a single phase smart meter and $615 for the three phase version. If the meters are to be distributed free -- a reasonable assumption since the program is compulsory -- it's going to cost electricity retailers hundreds of millions of dollars. This makes it highly likely that users will be forced to subscribe to time-of-day pricing: why bother spending the money on smart meters and then allow consumers to opt out of the scheme? It would make more sense to allow those wanting smart power's advantages to have a meter installed voluntarily.

If smart power causes people to pay more for electricity Tim Flannery will be delighted.


Anonymous Blandwagon said...

If the meters are to be distributed free -- a reasonable assumption since the program is compulsory -- it's going to cost electricity retailers hundreds of millions of dollars.

The intallation of underground power in Rossmoyne resulted in a compulsory connection fee of hundreds of dollars for each household... whether they wanted underground power or not. Given that, I wouldn't be surprised if Synergy made smartmeters compulsory and charged for them.

4:28 PM  

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