Like many before it, a recent bill from my electric utility included encouragements to purchase a hard-wired outdoor lighting system. With bulb wattages ranging from 10 W to 18 W, even a modest layout can use the equivalent power of several table lamps. The point is not to question the relative value of outdoor lighting against other energy-consuming products, but rather to question why an electric utility wants me to increase my overall energy consumption in an age where the prevailing theme of public discourse is how to reduce energy use.

The answer in this particular case is obvious. The company wants to increase demand for its product — electricity — at night, when it has an excess supply of it. It’s part of the concept known as load shifting — decrease demand during peak periods when supply is strained and move demand to off-peak hours. Many of the utility pilot programs utilizing time-of-use, tiered-pricing schemes are built around that concept, pricing electricity higher during peak hours and lower during off-peak hours. Appliance makers have participated in some of those projects. Utilities say such schemes can save consumers money and reduce the need to build new power plants. Even if both are true, it’s important to note that load-shifting per se does not save any energy or reduce any greenhouse gas emissions. A kilowatt hour used at night is still a kilowatt hour. A pound of coal burned at night is still a pound of coal burned.

So when appliance makers announce their intentions to design appliances compatible with the smart grid, they need to examine whether their objectives are congruent with the goals of their utility partners. The environmental imperative of reducing energy consumption and CO2 emissions does not perfectly mesh with the utilities’ desire to reduce its investment in new construction. Would the money spent on making an appliance smart-grid compatible be better spent by simply improving that appliance’s efficiency?

Time-of-use, tiered pricing might actually reduce energy use when applied to air-conditioning, as some pilot programs have concluded. Residential air-conditioning is a good target, as it represents on average more than 20 percent of a home’s electrical use and 5 percent of the nation’s electrical consumption overall. The test programs suggest that homeowners are responsive to this approach. However, with voluntary participation in most cases, these programs may simply be attracting those already predisposed to such efforts. So the question remains as to whether the results of the tests are representative of how the larger population would respond. A recent survey by MX Energy, Stamford, Conn., showed 67 percent of respondents saying they can’t live without air-conditioning. If true, that doesn’t bode well for time-of-use pricing schemes having a significant effect on air-conditioner use.

The tiered pricing idea also raises the fairness issue. Like a gasoline tax, it is regressive, falling harder on those at the bottom of the socioeconomic ladder. A more equitable approach is simple demand control, where the utility has the power to remotely change the temperature on a thermostat or shut off the air conditioner entirely. Implementing this approach on a mandatory basis might be politically difficult. Madison didn’t include air conditioning in the Bill of Rights, but many might revolt over losing control of it nonetheless. On the other hand, for those accustomed to rolling brownouts in summer, losing the A/C for a while would be preferable to losing the food in the fridge.

Regardless of which demand modification scheme gets pushed, the appliance industry needs to perform a cost/benefit analysis to determine if participation represents an optimal allocation of scarce resources. And the key question in such an analysis is who reaps the benefit: consumers, the environment, or utility shareholders. Appliance makers should be clear on the answer before jumping onto the bandwagon.

Richard Babyak, Editor E-mail: babyakr@bnpmedia.com