Meter madness: controversy over time-of-day rates and load management

Electric utilities, pressured to stop encouraging wasteful on-peak power use, are adopting new rate structures that reflect the higher costs of peak-load power. Critics of time-of-day (TOD) schedules argue that it can be counterproductive if utilities use it as a marketing tool by overstating peak rates and then overallocate capacity costs to peak users. If electric heat is made artificially cheap, for example, solar energy development will suffer. Other pitfalls could develop if high-cost reactors are allocated to peak users. Load management with interruptible service is a promising alternative successfully used by 33 utilities, although it is vulnerable to the same problems as TOD and both policies could give utilities new incentives to expand. (DCK)