Reducing Peak Electrical Usage
I ran across an interesting program on our electric company’s website the other day… In an attempt to reduce electical demand during peak hours on the hottest days of the year, they are offering people cash to have a small, remote-controlled switch installed on their air conditioner. When demand for electricity peaks on weekday afternoons (between noon and 7:00 PM) from May through September, the electric company will be able to throw the switch and reduce the run time of your air conditioner.
More specifically, the switch will reduce your air conditioner’s typical run time by 65%, meaning that if it normally runs for 20 minutes when it comes on, it will run for only 7 minutes when the power company needs to reduce usage. So what’s in it for the customer? First off, they’re offering a $20 credit for allowing the device to be installed. After that, they’re offering a $2 credit for every day that the system is activated. While this looks like a solid way to save a few bucks, there is little other financial incentive here. In fact, they readily admit that this program is unlikely to reduce overall electrical usage… That’s a bummer, as we’re always looking for tricks to reduce our electrical usage. Rather, load cycling programs such as this typically shift energy usage from peak periods to non-peak periods, thereby allowing a fixed amount of generation capacity to serve a greater number of customers.
As I recall, my parents took part in this sort of a program when I was a kid. However, I think they received a percentage off their bill for taking part, rather than a small credit each time the system is invoked. While I’d like to be a good citizen and help the power company out, we’re most likely going to skip this program. After all, my lovely and talented wife stays home all day with our boys, and I’m guessing that she won’t be crazy about having the temperature creep up during the heat of the day.
Anyone have any experience with programs like this?
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Modified on August 27th, 2006 - 5 Comments
Filed under: Energy, House & Home
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
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August 25th, 2006 at 1:42 pm
What electric company do you have?
August 26th, 2006 at 4:48 pm
As someone who worked in an after-hours dispatch center for power companies over the summer, if you do go on this program, and it starts working, DON’T CALL IN TO ME TO COMPLAIN ABOUT IT!
August 28th, 2006 at 3:49 am
Yeah, nice idea, but no thanks. Those are the hours that I’m trying to sleep. And if I don’t sleep during the day, I’m much less able to get work done at night.
August 28th, 2006 at 3:44 pm
I have one of these on one of my houses – its gold! I have never notice its affects except for the $2-$10/mo credit (depending on the month) on my electric bill from Duke Power.
February 25th, 2011 at 11:13 am
What you neglect to mention is that when the switch is in use, some of your most expensive (by number of watts consumed per hour) electricity isn’t being used–or billed for. In effect, it’s a programmable thermostat that the power company pays for instead of the consumer. The tradeoff, of course, is that the power company is in control of the programming.