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Time Of Use Electrical Pricing
Smart Meters have the ability to meter/measure your electrical use, based on the time of day. Your usage is then sent back to the utilities central office and your bill is calculated based on their "time of use" rates. These rates can change several times during the 24 hour day and usually change based on the seasons of the year.
Why use Time-of-Use vs Flat Rate?
Your power utility must have capacity to produce enough electricity to cover the highest "peak" demand during the day. This usually happens on a very hot summer day, during the week, in the middle of the day. For example, during a heat wave on a Tuesday, at 11:00 a.m. At this point in time, most people who work, are at work, most factories, offices and shops are in full production AND people have left their air conditioning running in their home. During this period, your electrical utility has every possible generator running to meet the demand. This includes the hydro electric plants, nuclear power plants, coal generators, etc.
With Time-Of-Use pricing, the end consumer may pay 3 or 4 times as much per kilowatt-hour for "peak" electricity as compared to their "off-peak" electricity. Therefore their is an incentive for discretional power use, to be moved into the off-peak timeframe. This levels the electrical usage for the Power Utility which may mean fewer on-demand generators are required.
Examples of Time Of Use Pricing - Ontario
Ontario, Canada is in the process of switching to Time-of-Use billing for electricity. Thus some of their customers presently pay a flat rate of 5 cents per kwh (for the first 1000 kwh/month). Other customers use the following time-of-use pricing charts:
NOTE: Time-of-use prices as of Nov. 1, 2008, when smart meters were first announced in Ontario, are shown in the table below. As of November 2010, the BEST rate (10:00pm to 7:00am) is almost the same as the everyday rate prior to the introduction of Smart Meters.
Tips to Reduce Your Electrical Bill
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