Tuesday, 9 April 2013

Bohemian Rhapsody

Mercury was the god of profit and thieves, amongst other things.  It always struck me as odd that a power company would co-opt the name, however it's a fact that one did.  And so we ended up with Mercury Energy.  A division of the soon to be owned by people apart from you and I Mighty River Power.

Their recent advertising has caught my eye.  They've introduced a thing called GEM, an acronym that stands for Good Energy Monitor.  Good, I suppose, because "Energy Monitor" is dull, though that's all it is, and because it results in a much better acronym.

It achieves two things.  It allows you to read your electricity meter without going outside.  It presents the data from the meter in a user-friendly and flexible format.  And neither of those things are particularly new, it's always been possible to do this, but it's required a little bit of effort and enough knowledge to read the meter.

The introduction of what are referred to as "smart-meters" began a few years ago, and it is being rolled out across the country.  Smart meters do have a couple of genuinely new features.
They can be read remotely, so there's no need to have a meter reader come around every month or two.  Apart from the resulting job losses, there are quite a few positive outcomes from this.
They can also be used to change the price of electricity with time, and this is actually what GEM is about.

Electricity demand has a diurnal profile.  That is, the highest demands occur in the morning (before people go to work) and in the early evening (when people return from work).  Market theory says that as demand rises, so should prices and as demand drops (as it does overnight, when everyone goes to bed), so also should price.
And that's what smart meters can do - allow anyone who wishes to do so to follow the market and bow to its whims.  I won't, because I am sufficiently well paid and the savings I can make from keeping an eagle-eye on a website showing my electricity consumption are not worth the effort.  It seems to me that most people won't be bothered either.  Which does four things.  It leads me to wonder about the fate of people who will watch their meters.  It leads me to wonder why Mercury Energy are doing this.  It leads me to wonder what I should do.  And it leads me ask, once again, could we as a society do this better?  So, in order:

There are people out there to whom an extra few dollars on the electricity bill each month makes a world of difference.  The active promotion of smart meters will focus them for a while on meter-watching and minimising their energy bill by going without when prices are highest.  It will be considered by people who have never gone without as enabling and enhancing individual choice.  Like choosing to go without heating in the middle of winter is a choice.  As someone who went without heating for several winters, I know from experience its not a choice, its using an abstraction ("the market") to inflict cruelty.  Smart meters encourage further suffering.

Why are Mercury Energy (and others) doing this?  It's simple.  They are commercial enterprises, if it isn't making money, it isn't happening.  So it's to make money.  The best I can figure is that it is intended to make consumers feel responsible for the cost of electricity, by giving them the feeling that they are in control of the cost.  Of course, individual consumers have very little control over electricity prices.  The reforms overseen by Max Bradford and National in the 1990s took something flawed but functional and amplified the flaws while keeping the appearance of functionality.  My expectation is that rates and thereby prices for electricity will rise, and the suppliers will use tools like GEM to say "we gave you control and it's up to you to use it", to deflect the criticism directed at them as prices rise.
Why do they need to increase prices?  To pay for the quite realistic 73% pay rise for the directors, perhaps. No, even though most of us got a percent or three if we were lucky, and 73% is genuinely ridiculous, that's not it.  Prices need to be increased to increase profits, which are necessary to meet the requirements of the commercialise model for electricity supply.  That's all.

What should I do?  Very little, I suspect.  All I can think of is that there are appliances coming out that can link to the smart meter and operate when rates are low.  This will mean my washing machine and dishwasher will run late at night and the spin cycle will wake me up.  <sarc>Being woken up will of course be a good thing because when the children tidy their rooms and leave a giant mountain of washing, I will need to be woken so that I can empty the washer and put a new load of washing on.  And another after that.  Because what I really want, after a full day of work, is to be up all night doing the washing.  Waking from my few hours sleep to a dishwasher that needs to be emptied so everyone has clean plates, bowls and cutlery for breakfast will be something to look forward to.  And with the hot water cylinder on ripple control and all the hot water used by the washing machine, a cold shower in the morning will be really refreshing.  I can't wait for smart meters and the opportunity to totally change my lifestyle around to suit the all-powerful market forces. </sarc>.  It seems likely that the first generation of smart appliances will have a premium, and I'll have to work out whether the benefits of buying one outweigh the extra cost, or whether it's better to wait until smart-meter compatibility is the default.

And could we do better?  Certainly.  The service that is delivered (and it is a service, I can't fathom why Mercury refer to it as a product) is the same everywhere, 50Hz 230V electricity.  Does having ten retailers marketing their service to me make that service any better?  No.  Does having five generators selling bulk electricity to the retailers make the service I receive noticeably better?  Still no.  Could it be run more efficiently if we applied some brains to its operation, instead of saying "It's in God's hands.  God will look after it, and make it work" (Pick your own god, the current ethereal abstraction is most commonly referred to as the market.  You can read about his recent works in the business section of tomorrow's paper)?  Yes, we could.  We just don't, and so we pay the price.  Literally.  Fortunately for people like me we have the aforementioned market to distribute the costs to those who can least afford it, and to absolve me of responsibility.

Footnote - smart meters, coming soon to a water supply near you.  Why restrict yourself to getting rorted for electricity when you can get rorted for water too?

Queen - A Night at the Opera, 1975


  1. Thanks for that explanation, AC. I sense a note of cynicism and perhaps resignation in your post.
    This is unfortunate and to be avoided (resigning, becoming a cynic). I hope you are developing a response and a strategy to thwart these developments and those who introduce them. Will jamming a stick into them help?

  2. I do have a cynical streak. In this case I'd like to think it's justified. We could do energy supply so much better, but we choose not to. Smart meters are an opportunity to do good things, but as it is, they are to be used to perpetuate some of the worst aspects of our society. All in the name of the pursuit of profit. To me, that's the really cynical aspect.
    Poking a stick in it won't achieve much. The problem is the electricity company, not the tool.
    The answer, and it is where I'm trying to head, is local production of energy. Your ideas about food production are just as applicable to energy production .