Economics: Time-of-Use Rates

Toronto Hydro now provides extensive data on one's electrical use; the graph above shows my own electrical use during the second half of November during off-peak (green), mid-peak (yellow) and on-peak (red) periods each day

TORONTO, ONTARIO - I returned home to find many fliers in my mail about the new Time-of-Use rates being implemented by Toronto Hydro, the local electrical utility. I knew that new meters had been installed last September (I was taking great amusement in seeing how much less electricity I had consumed than my neighbours since then, as we had all started over at zero, making it easy to compare), and I had rather been looking forward to the new rules, until I saw the actual rules.

I thought I did a decent job of using electricity at off-peak times, as I regularly cook dinner after 7 or even 8 pm and start laundry in the late evening, often doing it between 8 and 10 pm or later. However, that actually doesn't help much. Under the new Time-of-Use rules, the only time that power is discounted on weekdays (to 4.4 cents per kilowatt hour) is between 9 pm and 7 am. The rest of the day, power costs significant more than it has in the past. In fact, in the winter months, the highest rates (9.3 cents per kilowatt hour) will be imposed between 7 and 11 am and between 5 and 9 pm. Don't want to pay exorbitant rates for cooking dinner? You'll have to eat before 5 pm (when electricity costs 8.0 cents per kilowatt hour, still more than it used to before the change) or after 9 pm.

After seeing how the regime was going to work, I was not surprised to log into Toronto Hydro's web site, which is a nice new feature of the change, and discover that my typical electrical bill for a two-month period will go up from $63.96 to $67.04.


A graph provided by Toronto Hydro showed that my electrical costs will be increasing based on my usage during off-peak (green), mid-peak (yellow), and on-peak (red) periods during October and November

As I was someone who was already reasonably responsible with my electricity usage, I can only imagine how much the new rates may be hurting the average person (though considering that fact that dinner at 5 pm and 8 pm is the same under the new system, maybe everyone is having about the same impact as I will see). Except for pushing laundry even later into the evening (or getting up extremely early to do it), I scarcely see how I can improve the improve the situation. Is it really realistic to wake up at 5 am in order to bake cookies? I will just have to live with higher electricity rates.

One incontrovertibly cool thing about the new meters is the ability to log in on-line and see one's electrical usage the next day, when one might still remember what happened the previous day. For example, I was able to log in today and clearly see the time when I turned on an additional space heater in my apartment.


This graph showed my electrical usage yesterday, 12-January-2010--note the prominent spike (on-peak, no less) when I turned on an additional space heater about 9 am

I had high hopes for Time-of-Use rates reducing my electrical bill and creating more awareness of electrical usage. However, aside from the cool Internet interface for viewing electrical use, I doubt many people will find they can move much of their use outside the "on-peak" periods.