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J. Mijin Cha on January 11, 2007 - 10:52am
Here's a simple way for consumers to save nearly $23 billion a year in energy costs: just shift 7 percent of their electricity usage from a peak period (when everyone else is tapping the grid) to a less costly time. Run more washes at night -- when many power plants are currently idle -- and we can avoid building a lot more power plants to maintain excess capacity for during the day.
Chicago residents belonging to the Community Energy Cooperative are running a pilot program that is helping make these savings a reality. Instead of being charged a flat price for energy regardless of the time of day, they receive email alerts notifying them that energy capacity is being taxed to the limit and their electricity prices are set to rise above 20 cents a kilowatt-hour. Consumers can then alter their electricity consumption by running dishwashers at different times or lowering air conditioners -- and experience significant cost savings. "Smart metering" not only saves consumers money on their electric bill, it helps to stabilize energy production and consumption. The Chicago community program has been so successful that the Illinois legislature passed a law last year requiring the program to be expanded to 110,000 customers.
Power plant owners are not thrilled with smart metering because they make a huge profit from selling supplemental electricity needed when peak demand exceeds the supply. Reducing peak periods of demand would reduce the need for expensive generating stations that run only a few days, or even hours, per year. Smart metering is not a new idea, but the power-generating industry has successfully stopped wide-scale adoption of it.
As we reported in our October dispatch, the Pacific Northwest National Laboratory launched an even more ambitious regional initiative of new smart grid technologies. The project will give 200 homes real-time price information through a broadband connection. The connection will then automatically shift time of operation for dryers, water heaters and other appliances when the transmission system is under stress.
Smart metering is another easy step that states can take to help consumers save money, reduce unnecessary electricity production and lower stress on electric grids.