NCPA - National Center for Policy Analysis


January 9, 2007

If just a fraction of all Americans had hourly electric price information and could adjust their power use accordingly, the savings would be huge, says David Cay Johnston in the New York Times.


  • Consumers would save nearly $23 billion a year if they shifted just 7 percent of their usage during peak periods to less costly times, research at Carnegie Mellon University indicates.
  • That is the equivalent of the entire nation getting a free month of power every year.

But while meters that can read prices every hour or less are widely used in factories, they are found in only a tiny number of homes, where most meters are read monthly.  And companies that generate and distribute power have little or no incentive to supply customers with hourly meters, which can cut into their profits.

But this monopoly is beginning to weaken, says Johnston, as people realize the benefits of "smart meters":

  • In Illinois, for example, the legislature passed a law in December requiring the Community Energy Cooperative -- a pilot project utilizing smart meters -- to be expanded from 1,100 customers to 110,000.
  • Another energy cooperative in New York actually made money using hourly meters -- during a blackout, residents of one building on Central Park West voluntarily cut their demand as much as 42 percent and sold the capacity back into the electricity market for about $3,000.
  • That money helps the building offer a valuable benefit -- on most weekend mornings, electricity for residents is free.

Source: David Cay Johnston, "Taking Control of Electric Bill, Hour by Hour," New York Times, January 8, 2007.

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