smart spending

Cut your demand and pay less for power

To keep his bills below that, Greenhalgh monitors his demand with a built-in energy monitor. His particular device is an Energy Sentry made by Brayden Automation Corp. in Fort Collins, Colo. It is one of the more sophisticated models and recommended by numerous utilities, but other companies sell similar devices. When shopping for one, check out the features to make sure it will do what you want. Some monitors, for example, will tell you how much power your stove is drawing. That might be useful if you're trying to decide whether to buy a new one.

Greenhalgh's monitor evens out his home's demand for electricity by controlling when and how often high-voltage appliances are used. The Jacuzzi won't come on when the oven is operating; the water heater won't cycle while the refrigerator motor is running. And neither the Jacuzzi nor water heater will run when the air conditioner is pulling power.

For the most part, these delays are invisible to him and his wife, Greenhalgh says, and not an inconvenience. "The only thing that we do that other people may not do is use the clothes dryer during off-peak hours," he says.

In Greenhalgh's case, the savings are pretty dramatic, cutting his power bill about 30 percent or $800 per year. Brayden sales manager Kent Mueller says Greenhalgh's experience is typical; some homeowners save even more if they live in the kind of climate where winter heating rivals summer cooling bills.

Installing the equipment, however, isn't cheap: between $1,000 and $2,000 based on the size of the house. And it's not a do-it-yourself project unless you're a licensed electrician.

Some utilities such as Otter Tail Power Co., which sells power in Minnesota, North Dakota and South Dakota, will lease Energy Sentry monitors at a nominal rate. Mueller says customers who decide to purchase a monitor instead of leasing should see a payback in less than two years and they can take the equipment with them if they move.

Demand pricing not in universal demand
Unfortunately, demand-based pricing is nowhere near universal. Mueller estimates that fewer than 20 utilities nationwide offer it. And some that once offered it have backed away.

"Some worry about revenue erosion," says Kim Pederson, manager of market planning for Otter Tail. But her calculations are different. In the states where Otter Tail does business, there haven't been rate-increase approvals in more than 20 years; the utility hasn't built new plants and that has made conservation more attractive so that the company can meet service needs without facing shortages.

Otter Tail has persuaded 40 percent of its customers to adopt some sort of demand-based pricing. If demand pricing appeals to you, call your utility and ask if it's available. If you live in a deregulated state like Texas, ask all the power resellers who are courting your business whether they offer the alternative-pricing plan.

Even if your electric company answers "no," you may want to keep asking. So few people take advantage of this kind of pricing that customer service representatives might not know it exists, says Harvey Michaels, CEO of Nexus Energy Software, a company that partners with utility companies to provide information about energy-related services. His company's Web site offers a database that uses your ZIP code to link you to any money- or energy-saving offers from your utility company. A demand-based pricing plan may be among them.

Michaels is an advocate of demand pricing and believes that it's much more fair.

"Without it, it's like the grocery store charging by weight so you pay the same for cat food and caviar. There's no reason why people who leave the air conditioning on when they're not home shouldn't pay more than people who turn it off."

Jennie L. Phipps is a contributing editor based in Michigan.


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