Utilities seek okay for smart meters

TORONTO, ON -- - Utilities that want to reward customers by charging them less money for using electricity at off-peak hours came away hopeful but still empty-handed after a recent meeting with ministry of energy staff.

Milton Hydro, Toronto Hydro and Enersource Hydro Mississauga all want to encourage small businesses and householders to install the ``smart'' devices called interval meters that reflect market prices.

By charging customers high prices in periods of peak demand and low prices when there's less demand — such as overnight and on weekends — the theory is that customers will use more off-peak power.

That eases the strain on Ontario's power system, which can't generate enough electricity to supply the province's homes and businesses at peak periods, and suffers from transmission bottlenecks in key areas when demand is heavy.

The provincial government killed any incentive for householders and small businesses to install interval meters last November when it froze the price of power at 4.3 cents a kilowatt hour until 2006.

The three local utilities are nonetheless eager to install more interval meters — and want the province to allow them to reward customers who install the meters and change their power usage.

Current rules forbid them from cutting rates for customers who use power in off-peak times, when market prices generally decline.

Don Thorne, chief executive of Milton Hydro, said yesterday that the utilities have been told they will have to make their case to the Ontario Electricity Finance Corp., the provincial government corporation that's underwriting the rate freeze.

So far, the rate freeze has swollen the debt held by the corporation — and therefore by Ontario taxpayers — by $600 million.

Interval meters cost up to $400 each to install. Local utilities want help in financing the initial cost, arguing that all parts of the electricity system benefit if the meters encourage customers to change their habits.

Thorne said the province and the utilities are exploring whether Ottawa might help pay.

Milton Hydro is also hoping to launch a pilot project with the Independent Electricity Market Operator that would see the installation of interval meters in 300 homes. Householders would get varying levels of education about the electricity market and how to track their power consumption and cost, and the utility would track their market behaviour.