In November of 2005, the Ontario government introduced legislation to start the process of getting "smart meters" into every home and small business in the province, a process that should be complete by 2010.
The province claims smart meters will give consumers more control over their electricity costs by allowing them to shift electricity consumption to times when electricity costs are lower.
So what is a Smart Meter?
A smart meter looks similar to the traditional electricity meter, except the display is digital and there are no dials.
Traditional meters have dials that measure the total amount of electricity used in a billing period, typically one or two months and are read manually. Smart meters record how much electricity is used by the day and by the hour and the information is communicated automatically through wireless or other remote technologies.
Because Smart Meters are able to monitor how much electricity a homeowner uses each day and hour, it allows utilities to introduce Time-of-Use (TOU) rates.
The following image shows a Smart Meter beside a traditional electricity meter.
What are Time-of-Use (TOU) rates?
Time-of-use rates refer to electricity prices, which vary based on when electricity is used. That includes by time of day, by day of week (weekdays versus weekend), and by season (winter or summer).
TOU rates typically reflect the way the wholesale electricity market works. Electricity prices rise and fall over the course of the day, and tend to drop overnight and on weekends, based on the amount of supply available and our levels of demand.
For example in Ontario, there will be three time-of-use periods:
Highest price - refers to when demand is highest
Mid price – refers to when demand is moderate
Lowest price – refers to when demand is lowest
At this time, a date has not yet been established for complete implementation of time-of-use (TOU) rates in Ontario. In Toronto, about 250,000 homes are subject to TOU rates and most Ontarians can expect to be turned over to TOU rates in 2010. The Ontario government has said that all home owners will be notified in advance of when they will come into effect.
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