On Electricity: Demand Tariffs are Dumb

 So, recently I got forced into replacing my "dumb" meter with a "smart" meter, and sure enough I get an email from my energy retailer that "Surprise! your electricity tariff is changing". Now this retailer send me this amazing news 4 days AFTER the tariff change took effect, but I have already come to a settlement with them about that gem.

Needless to say, with the subject of this post, I got plopped into a Demand tariff. At first glance it didn't look too bad, the daily charge was lower, the per kW charge was slightly lower as well, however it had a Peak Demand daily charge to figure out.  Essentially they get energy usage from your meter every 30 minutes and the highest usage between the hours of 16:00 and 21:00 is the lucky winner for the Peak Demand charge.  Each half hour block has a usage figure in kWh, so to get the Peak Demand you multiply that by 2. {X}kWh/0.5h. 

This can lead to nasty surprises and sure sent my blood pressure when I worked it out, as I was on a quarterly bill cycle and those days since the change I would have had the car plugged in, plus people cooking etc. unaware of the peak demand impacts. This was somewhat mitigated when they automatically switched me to a monthly bill cycle.  Having a spike 1 single day where you might turn on the A/C and be cooking using say, 5kW for half an hour... that'd be 2.5kWh at a rate of ~$0.26 for the electricity, or $0.65, however that one lapse has a daily charge of $0.35 per kW, per day so 5 x .35 x 30 days = $52.50. If your normal peak usage was around 1.5kW that adds $36.75 to your next bill.  You used $0.65 worth of electricity, but it will cost you that plus $36.75. The thing is you may as well run the A/C *every* day because once you take that hit, using an extra $0.65 worth of power to run the A/C won't add any further demand charges so long as your peak doesn't exceed 5kW.

Now where this gets somewhat nasty. I still have an off-peak tariff for my hot water and pool filter which typically cuts off around some time around 17:30-18:30 and doesn't kick back in until 21:00. Though this Peak Demand doesn't just apply to my Demand tariff, but total consumption including the off-peak. Surprise, pool filter running at 16:00? included.  Ok, so I adjusted the pool timer to cut out before 16:00, I also set the electric car to not start charging until after 21:00.  Hot water system? Not a lot I can do, but it shouldn't be kicking in before 21:00 and as far as I have seen when checking the pool equipment (lights up when the off-Peak is online) it hasn't been kicking back in.  From past usage our peak period seems to be the 20:00-21:00 which will be when my main PC is running, plus the daughter's laptop for homework, and the Mrs. watching TV. However while this is pretty consistent around 1.1-1.3kW, I have seen one day where it was 1.8kW which is a bit suspicious where that extra 1/2 kW might have come from. Possibly it was some cooking with induction, or the bigger fear is that the off-peak tariff could be coming back online prior to 21:00 rarely, where the HWS is kicking back in after being off and warming after some dishes and a shower or two happens before 21:00. The power company could be "sneaky" and ensuring that the off-peak tariffs manage to get turned back on early one or two days a month, as this would end up padding peak demand figures for a lot of residents for the entire month.  This isn't helped by the fact that while my energy provider does provide usage figures online, it only provides hourly intervals, not half-hourly intervals so I have no visibility to review or anticipate charges that are based on half-hourly usage. My bill also does not state which day & interval they used for the peak demand charge. 

What is dumb about this tariff is that it can be gamed, and doesn't really accomplish what it claims to accomplish. If you have guests over and want to run the A/C for 30 minutes to cool down a room, then you're going to use 2.5kWh of energy depending for that 5kW system, but if you turn on the AC on the hour/half-hour, it will count entirely to a single interval, hitting you for 5kW peak load. Instead, if you wait for a 15/45 min mark, then the load splits across 2 intervals, adding only 2.5kW to each interval. Same load, different potential billing impact without "spreading out the load." at all.  Ideally you should aim to avoid usage during your typical peak interval, but this trick can help prevent a one-off usage forming a new peak interval which impact will be multiplied across the entire month.

I suspect the power companies really want everyone on a Time of Use tariff where each time interval has a variable price per kW so they can discount prices during quiet times and charge everyone 3x or more during peak hours, but that's an extremely bitter pill for consumers. When it comes to electricity, the consumers end up paying repeatedly for the lack of preparedness of the energy providers.

Overall, with the changes we have made to our scheduling, or electricity costs *should* be lower than what we were paying on the old fixed tariffs, but I have to wait until next month's bill to confirm that since this month's peak usage will be skewed from before I could alter the car charging and pool filter timing. I can't say I'm optimistic though, the break-even peak demand figure I calculated based on previous bills was 2.45kW. We'll save if our peak is 1.3kW or even this unexplained 1.8kW, but not a huge buffer when the last bill reported a peak of 3.67kW, and this next one will likely be over 3kW as well.