This struck me as really good news—that is, until I thought about it.

AP is running a story that U.S. consumers could save between $5 and $15 billion a year on their annual electricity bills by shifting their power consumption to off-peak times of day, when electricity is cheaper. In the past such shifts would have been impossible, both because electric meters didn’t record the time of day that electricity is used, and because utilities didn’t have any system in place to tell people when power was abundant and when it was scarce. But new technologies have changed all of that: new meters can record not only how much power is used, but when; and intenet-based technologies can let power companies communicate directly with people’s appliances, so that they can turn themselves on when power rates dip. Nifty.

The thing that struck me, though, was not how much these technologies can save, but how little. For a country as large as the U.S., saving $10 billion a year is just $3 per person per month. Now, that’s nothing to sneeze at, but it’s also nothing earth shattering—just a very small part of the effort to hold down greenhouse gas emissions.

  • Moreover, the environmental benefits of time-of-day pricing may not be as great as the financial ones. These technologies can help hold down peak power demand, which is a good thing—peak power is often provided by inefficient generators that are turned on only when demand is high. Still, even if you do your laundry at night when power is cheap, your electricity is still being generated largely from fossil fuels. It’s a power shift, not a savings—there are some greenhouse gas emissions either way.

    In the Seattle area, Puget Sound Energy tried a time-of-day pricing program, but it was a bust: people had to pay a small fee to participate, and the savings they saw from shifting often didn’t make up for the cost of the program. Eventually the program was scrapped.

    That doesn’t mean that time-of-day pricing isn’t a good idea. But even if it can be implemented successfully, it’s just one of many, many steps we’re going to have to take if we’re going to send greenhouse gas trends in the right direction.