Study suggests time-of-use billing will bring farmers modest savings

Monday, December 6, 2010

But, says one farmer, overall increases in electricity costs may eat up the savings

by DON STONEMAN

Time-of-use billing isn't going to increase hydro costs in dairy barns. Indeed, some small savings will result, according to a study conducted by Hydro One, the largest distributor of power in rural Ontario, and the Ontario Federation of Agriculture (OFA).

The study was conducted on 50 Ontario dairy farms in 2009, explains OFA policy researcher Ted Cowan.

The farms were of varying types and sizes where time-of-use meters were hooked up. Farmers were billed on an ordinary basis, while time-of-use information was collected in the background and costs were recalculated. With time-of-use billing, a 30-cow tie stall operator can expect to save $60 a year compared to conventional billing. An 80-cow tie stall operator will save $170 a year. Similar savings were achieved by a 200-cow parlour operator.

This 3-4.5 per cent saving "shouldn't be too surprising for people," says Cowan, adding that "farming in general" is conducted at slightly off peak hours.

From Friday at 9 a.m. until Monday at 7 a.m., power usage is billed as off-peak at 5.1 cents/kWh, according to Hydro One's website (effective Nov. 1). The same rate also applies to 11 statutory holidays. Power used between 9 p.m. to 7 a.m., all year round, is also billed as off-peak.

So the cheapest rate applies to one third of the hours in a year, Cowan says.

By contrast, on-peak pricing hours are 11 a.m. to 5 p.m. in the summer (six hours) and in the winter 7-11 a.m. and 5-9 p.m., a total of eight hours. Winter is defined as Nov. 1 to Apr. 30, Cowan says. Power used then is billed at 9.9 cents/kWh.

In total, about two-thirds of the hours in a year are off-peak hours. Peak and mid-peak hours are split 50-50, Cowan says. The Hydro One website says power used in mid-peak hours is billed at 8.1 cents/kWh.

Cowan presented results of the study at an OFA directors meeting in October. He has access to the study, but because of an agreement with Hydro One isn't allowed to reveal more about how it was conducted. OFA directors who have seen the study are also not allowed to discuss it. Better Farming was not able to arrange for an interview with anyone at Hydro One about the study to find out why it is secret.

The OFA had previously lobbied the Ontario Energy Board for relief from time-of-use billing until a customer exceeded a power threshold of 10,000 kWh a year. Dairy Farmers of Ontario staff is aware of the OFA-Hydro One study but has not seen it, says George MacNaughton, director of DFO's production division.

Carleton Dairy Committee member Richard Fraser of Stittsville is keenly interested in electricity costs. He says he asked his local utility, Hydro Ottawa, about doing a study several years ago when the concept of time-of-use billing was first introduced. He says the utility wasn't able to do it at the time for technical reasons. 

Overall increases in costs may eat up any savings" that time-of-use billing brings, he says. BF