Last week I signed up for Dominion’s smart pricing plan. I haven’t heard about when they will install a smart meter at my house, but I am looking forward to trying this out.
Dominion is implementing a Time of Use (ToU) pricing plan in an attempt to reduce peak demand. As I mentioned before, one of the main goals of the grid modernization plan is to reduce peak demand. Here is a Dominion’s graph about their energy usage. The graph does not show any actual values for usage but it does a pretty good job of showing how usage varies across the time of day.
Image Source: Dominion Customer Letter
Pricing will vary depending not only on the time of day but also on the particular day. Dominion’s plan classifies each day either as a High Price, Medium Price or Low Price day. Here’s their graph showing how the price varies:
Image Source: Dominion Info Guide
Will we reduce waste and consume electricity more efficiently because of these smart meters? It will certainly be interesting to find out.
Pulper Tank 
So what it looks like the single easiest/quickest way to really reduce your energy bill is to have your Air Conditioner know that a "A" day, with potentially 44 cent energy, is about to occur, and run your AC as hard as possible in the morning to cool the house, and then cut it off right at 1 PM so you aren’t incurring the high cost? And if the A day is the weekend, just plan on going tubing or otherwise being out of the house. I wonder though, can a typical air conditioner cool down a house quickly? I know that if I start mine up at 7 PM, when energy prices fall, it will take a couple hours to drop the temperature down.
Air conditioners constitute the bulk of consumption and controlling them would give you the best returns. Although the pricing changes at the time-slot boundaries are instantaneous jumps, I suspect the typical energy consumption along those boundaries will change gradually. Meaning, instead of turning the a/c on or off at the time boundaries, changing the temperature settings might give the best tradeoff between cost and comfort. So in the low-cost hours, you could crank up the a/c to say 65 degrees and in the high-cost hours you could cool it to only 70 degrees. Intelligent cooling would also improve the cost/comfort ratio. If the a/c system could be controlled to cool only certain parts of the house, then you could certainly go for an on-off consumption pattern. I think the bigger picture is that this kind of pricing schemes are a start in educating consumers about the unique nature of electricity pricing. When the price of any commodity goes up, people adjust their consumption pattern. The problem with electricity was that this cost increase was never communicated to the user. I think that utilities must do a better job of explaining demand-response issues to consumers.