TasNetwork’s proposed demand-based pricing change (the Mercury Dec. 19, page 7), more accurately known as Time-of-Use pricing is a significant departure from the existing fixed price per kilowatt/hour to one whereby the price of power changes on an hour-to-hour basis, depending on overall power demand. In other words during those hot summer days when people have the air conditioner on, or on those freezing winter nights, your electricity will cost significantly more - meaning more profits to the electricity provider. According to the theory, higher prices will encourage consumers to change their daily energy use habits to use their appliances during lower pricing times, thereby saving money. This is a problem as research indicates that most consumers are unlikely to be able to shift their energy usage times and do their washing, cooking, watching TV or using their air-conditioner at other times, such at 2 am! Therefore for most consumers their electricity bills will increase unless they are insomniacs. Demand-based pricing also necessities the roll-out of advanced digital metering electricity meters (the so-called smart meter). Who is to pay for this? Ultimately it will be the consumer.
One of the unstated reasons for the nationwide push demand-based pricing and the roll-out of advanced digital meters to make it all work, is that the only way to really take advantage of it is to get rid of many of your old appliances, such as washing machines, dryers, air conditioners, etc. and purchase new smart appliances that can be programmed to automatically operate at low power pricing times. This is acknowledged by Zealand Network Tasman Ltd where they have stated that the purported benefits of time of use pricing and digital smart meters is so that “Consumers can set energy efficient appliances to interact with their advanced meter to alter usage to suit their lifestyle and manage electricity costs”.
The problem here, especially for low-income consumers is that this would require an investment of several thousands of dollars to upgrade their home appliances if they want
to reduce their power bill - a fact not mentioned in the promotion for the advantages of demand-based pricing. It’s worth noting that all the major appliance manufacturers are now
promoting demand-based pricing and the infrastructure to go with it as a way to create a global market for their new range of smart appliances.
If we consider another hydro power-state, this one in Canada, An investigation by Ontario’s auditor-general Bonnie Lysyk , published in December 2014, found that Ontario’s $2 billion demand-based advanced metering program failed to meet claimed electricity conservation or cost-reduction goals and delivered few benefits at a hefty cost. She specifically criticised the province’s energy bureaucrats for plunging into the system without proper planning, and making it impossible for consumers to understand their rising hydro bills. Is Tasmania to repeat this folly?