Price Feedbacks and Conservation

Stoneleigh at The Oil Drum discusses the importance of feedback for conservation providing the example of a electricity utility in Canada.

In 1989, Woodstock Hydro instituted a voluntary program intended to reduce bad debt. For a small fee per month, it installed a pre-payment meter in the home of each customer choosing the option. Customers were given a smart card, which they would use to purchase an electricity credit of whatever amount they chose from any one of a number of local retailers. A new meter with a remote display offered real-time feedback in a form comprehensible to all and in a convenient location where the customer could easily check the information as to how quickly the card was being depleted. There was no opportunity to accumulate bad debts, and therefore no need for customers to be disconnected and then reconnected – for a substantial fee – as is common practice under other utilities.

…Customers typically save more per month from reduced consumption (15-20%) than they pay (as a small daily supplement to actual consumption) to be part of the program. Approximately a quarter of the customer base now participates in the pre-payment initiative.

…What Woodstock Hydro had inadvertently discovered was that they had managed to design a program which tapped into customers’ psychological drivers for conservation. With real-time feedback, consumers could immediately see the price consequences of any given act of consumption. By watching the display unit in their kitchen, they could see the balance on their card decrease at different rates depending on their own actions. As a result, they quickly learned for themselves how to keep that decrease as slow as possible. In short, they had been transformed from passive consumers into active consumers.

…There is no reason a Woodstock-type metering system should not be combined with TOU (Time-of-Use) pricing. If the original scheme resulted in savings of 15%, combining that with TOU pricing as well an extensive education campaign should be able to achieve both additional conservation and load-shifting. If also combined with incentive programs to encourage the replacement of incandescent lighting and aging appliances, consumption could potentially be reduced by far more, and in a relatively short space of time.

In South Australia currently Aurora Energy; a retail electricity provider has started a Pay-as-you-go system and from my understanding there is a good deal of demand from low-income households for this. The Aurora program also includes Time of Use pricing.

In our workplace where our Offices are spread over 300 buildings I have proposed the following.

A similar system of feedback and education should work in the workplace too however, due to the complexity of the budget system there needs to be a third area of incentives to motivate managers to take action.

One, provide a monthly report on the energy used comparing the best performers (on a per capita basis) to the worst performers. Two, provide incentives to managers to keep a percentage of the savings for the office.Three, educate on the importance of conservation in terms of financial and energy savings.

We should know in a year if this program will work.


2 thoughts on “Price Feedbacks and Conservation

  1. Pingback: Smart Meters and Energy Conservation « World is Green

  2. Pingback: More on feedbacks and behaviour change « World is Green

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