Timing Is Everything

by Rich Finzer

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Rock guitarist, Tommy Shaw, once remarked "timing is everything." In saying so, he was referring to the effort involved in arranging a piece of music. I like music, but I like saving money even more. And to me, timing is important particularly when it centers on using electricity. You see, my electric company grants me dollar-saving incentives to use electricity during off-peak hours. They even provide me with a special digital electric meter to monitor the juice I'm using. That little device is called a Time of Use meter or TOU for short.

Basically, the program works as follows. From 7AM - 9PM Monday through Friday, I'm billed for power at the regular rate. However, from 9PM until 7AM the following morning, during the off-peak period, any electricity that I use receives a 30% discount. And from 9PM Friday night until 7AM on Monday the 30% discount applies for any power I use over the entire weekend! My TOU meter keeps track of how much power I use and when I use it. Let me assure you, this is a really good deal for me. And, it's a really good deal for the electric company as well. Here's why.

Electric companies generate most of their power using the cheapest energy source available, which usually means coal, hydropower, or nuclear. When demand spikes during the blistering summer months because everyone's air conditioner is roaring, utilities are forced to fire up natural gas generators to try and meet that increased demand. Natural gas is very expensive and many electricity providers actually lose money running these gas fired peak load plants. Thus, during peak load periods, it's fairly common for many utilities to find themselves in an economic bind. The maximum rate they can charge has been set months/years in advance, but at the same time, they have no method for controlling their customer's demands for electricity or the price for natural gas. Up until now that is. With the advent of TOU technology, they can provide an economic incentive to customers who choose to use less power during peak periods. By smoothing out the spikes in the demand curve, the utility saves money, and they pass a portion of that savings onto their customers in the form of discounts. Everybody wins. But please don't get the impression that the utility companies are suddenly awash in altruism.

Because of the public's NIMBY attitude, stifling environmental regulations and a site permitting process that might drag on for 10 years, the digital TOU meter has enabled utilities to build fewer power plants while still generating enough power to satisfy our needs. This is particularly compelling given that the domestic demand for electricity has been rising about 15% per year and is projected to continue doing so for at least another decade. Shifting as much load demand to off-peak hours saves utilities the cost of building new generating facilities while allowing their existing sites to operate at maximum levels of efficiency. So the electric companies are actually more profitable while generating the same amount of power. That's why they don't mind discounting your off-peak power usage. But as long as you save money, who cares?

By now you're probably asking, "Hey Rich, where can I get one of these TOU gizmos?" In most cases, a call to your utility's customer service desk or helpline is your best bet. If your electric company offers TOU meters, those folks should be able to put you wise. Then they'll schedule a technician to drop by and swap out your old analog meter (the ones with the spinning dials behind the glass) for a new TOU. The installation time is usually less than 1 minute. The electricity guy will pull the old meter off the four contacts/prongs that hold it in place and pop on the TOU unit. If your existing meter is externally mounted, you don't even need to be home when the exchange occurs. I was home when my meter was swapped and it actually took the technician about 15 seconds to perform the work.

It would be an understatement of biblical proportions to say that my TOU meter has altered my power consumption habits. For while I'm using about the same amount of electricity I always have, I use it much more wisely now and save money. These days, at 9:01PM sharp, the dishwasher springs to life as do my washing machine and dryer. The funny thing, too, is that the dishes don't seem to care when I wash them. Neither do my blue jeans.

Take the Next Step:

  • Check with your electric company to see if they grant dollar-saving incentives to use electricity during off-peak hours. A time of use meter just may be one smart way for you to keep more of your hard-earned dollars in your pocket.
  • Stop struggling to get ahead financially. Subscribe to our free weekly Surviving Tough Times newsletter aimed at helping you 'live better...for less'. Each issue features great ways to help you stretch your dollars and make the most of your resources. Subscribers get a copy of Are You Heading for Debt Trouble? A Simple Checklist And What You Can Do About It for FREE!

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