Toronto goes TOU: Smart Grids in Canada

It started this week. On the first of June, 10,000 Toronto Hydro clients became the first wave of participants in what will be the largest implementation of Time of Use (TOU) electricity tariffs in North America. By year's end, all of the utility's 678,000 customers will be on TOU rates. Charging more for power when it is in high demand and less during down times is intended to send the right signals to energy users. The immediate goal is to increase overall efficiency and reduce electricity use. But the shift to smart grid technology also marks the beginning of a new era in the way we think about and use electricity.

Rather than the standard 5.7 cent flat fee, Toronto Hydro customers will be paying between 4.2 and 9.1 cents per kWh. Electricity is at its most expensive between 11am and 5pm and cheapest when demand is low (on weekends, holidays, and overnight). Users also have access to detailed real-time information about how much electricity they are using (and how much they are paying) thanks to newly installed smart meters and an online interface. ( In late May, the utility also announced that it had partnered with Google. The partnership makes it the first Canadian utility, and one of only 8 worldwide, to test drive Google's new PowerMeter software.)

The hope is that people will respond to the tariffs by switching major appliance use (like dishwashers and laundry machines) to off-peak times. Beyond that, just by giving consumers a clearer picture of of how much power they are using they will reduce their consumption. Individually, we all get lower bills. Collectively, we lower the costs and emissions generated when our power utilities have to run extra generators to meets spikes in electricity use. That's the idea.

TOU Then and Now
TOU tariffs first saw the light of day during the energy shortages of the 70s and 80s. Utilities got the right to charge different rates to smooth out the peaks and valleys in demand (called load shifting), thus making the system more efficient. But the tariffs were rarely used. Since then, advances in technology have made TOU systems easier to manage. And, they have been rediscovered as part of the interest in smart grid technology that promises to be a significant component of both our responses to climate change, and the infrastructure investment that is hoped to get us out of the current recession.

The Ontario government mandated that all residential and business customers in the province must be on TOU rates by the summer of 2011. As an early adopter, Toronto will be an interesting case study of how effective the new system is in both shifting load and reducing demand. TOU metering is a response to the amazing inefficiencies of our previous system. With a system set up so that we can consume energy without thinking of it we use far more than we need to, and in ways that mean that our utilities have to keep costly (and often inefficient) generation capacity on standby to meet spikes in demand. By some estimates, the top 10% of our generation capacity only gets used 1% of the time. But keeping that 10% up and running is both pricey and polluting.

A New Energy Culture
Load shifting will accomplish a certain amount right off the bat. But the real gains will come from making all of us more aware and critical of the way we consume energy. Think of any technology and inevitably the most interesting part – the part with the most impact – isn't the details of the technology itself. It is the social changes that the technology brings about.

The Internet, for example, isn't about the dull details of http protocols, it is about the way the technology has changed our relationships with each other and the world around us. In a similar vein, smart grids and TOU metering mark the beginning of a new way of relating to energy - one that is more critical and aware. The technology itself is only going to get us so far. But I can see the impact of the technology getting us much further. And it has to. Paradoxically, increasing efficiency on its own can often increase consumption, not reduce it.


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This is a blog for news and views on the future of sustainable cites. A major revamp is in the works. Until then I am keeping this version up as an archive of my past writing.

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