Off-Peak Laundry? Pricing Power by the Hour

"We've got very strong reservations about applying this across the board to people with certain life circumstances," said Paula Carmody, director of the Maryland People's Counsel office, an advocate for utility customers. "People would be charged extremely high prices at some times of the day." The counsel opposes a proposal by Pepco to install the meters in Montgomery and Prince George's counties. Regulators are scheduled to take up the plan early next year.

Dominion Power has applied to Virginia regulators to install smart meters in a program to test conservation programs in 4,500 homes.

In the District, Pepco is conducting the pilot program with city consumer advocates and the electrical workers union.

Some customers will receive advance information about the price of electricity during about 15 days in July and August and three days in the winter, when demand is highest. During those hours, they will be charged 81 cents a kilowatt-hour, compared with the average summer price of 11 cents. But they'll pay only 9 cents at off-peak times, and their bills will be lower than their neighbors' bills, officials said. Others, including the Schwabishes, will get rebates for reducing their consumption. Another group will get rebates for allowing the utility to turn off their cooling systems.

BGE plans to bump its peak kilowatt-hour price to $1.30 and its off-peak to 9 cents as part of its test, Case said.

Smart meters look like traditional ones, but they can record a home's use of electricity every 15 minutes and feed the information to the utility.

The utility sends price information to its customers by e-mail, text or pager message or automated phone call. The Schwabishes and hundreds of others in the D.C. pilot program got another device, too, a "smart thermostat" that will allow Pepco to send a radio signal to their home to cycle down their central air conditioning for 15 or 30 minutes an hour when power prices are high and ramp it back up then they fall.

Electricity prices move up and down all day on the grid that feeds power to the mid-Atlantic states, though most people might not know it. A typical customer's bill doesn't reflect the fluctuation and instead is based on the average price of the power used over a month.

Electricity costs more at peak hours because utilities, to meet rising demand, must start up generating plants that can be fired up quickly and are more costly to run, or buy expensive power on the grid. Utilities would save money if people shifted electricity use to the night, when power plants usually run below their capacity.

"You'll say to yourself, what am I willing to pay today?" said Steve Sunderhauf, one of those leading Pepco's program in the District. "Maybe it's a hot day, but I don't want to pay that much. Maybe I'll go out to dinner and make sure my air conditioner isn't running."

When the price reflects the cost of power and utilities shift away from flat bills based on averages, electricity should cost less, he said. The District could reduce its consumption by 80 megawatts during the July-to-August peak, enough to power 26,700 homes, Sunderhauf said.

Utility officials say they hope to eventually install smart meters in every home. Pepco, for example, wants its 1.8 million customers to have them by 2012.

The technology isn't cheap: Each meter costs $180 to $240, an expense that will largely be passed on to customers. Pepco said in its filing with D.C. regulators that it would add a $6 surcharge to bills if the $2 million pilot program, which it is paying for, is expanded. The utility said the extra costs would be offset by an average savings of $8 a month.