Wednesday, June 6, 2012

Smart Meters and Competition Make "Free Power Day Plans" A Reality

If you drive around the major highways in the Harrisburg, Pennsylvania area, you will see eye-catching billboards promoting free electricity. Not surprisingly, free electricity sounds good to many consumers, but is it real?  And why is it being offered in central Pennsylvania?

Indeed, Direct Energy, a leading competitive electricity supplier, is offering a pricing plan that revolves around one day of free electricity each and every week, in the PPL service territory.  To make matters better, the consumer picks the day.

Despite the strong consumer response to Direct Energy's offer, free power day pricing plans remain highly unusual for one reason: metering. Few consumers live in a utility service territory, where both smart meters have been installed at all the homes and businesses of customers, and where state law embraces retail competition for electricity generation.

Simply put, old meters that record just the total electricity consumed in a month, without recording how much power was used each hour or even every five minutes, make it economically impossible to customize electricity pricing plans to the usage patterns of consumers.  No mass installation of smart meters means no Free Power Days.

Direct Energy is offering the Free Power Day Plan and other innovative pricing plans to customers that live in the PPL service territory in Pennsylvania, because PPL has installed "smart meters" at all of its electricity accounts.  To date, PPL is the only Pennsylvania electric utility to do so, though all Pennsylvania utilities are deploying them. Pennsylvania state law (Act 129) in fact requires the completion of smart meter installation essentially by about 2020.

As a result, in the coming years, thanks to electricity competition and smart meters, nearly all Pennsylvanians may have the chance to choose among various pricing plans, including the attractive Free Power Day.

No comments:

Post a Comment