Smart (and Stupid) Metering
Last week, Chris Mooney – co-author of Discover Magazine’s blog The Intersection – wrote a blog post about how electricity use is metered in his new apartment building. It’s a great example of our mixed incentives structure, which in many cases actually discourages conservation and efficiency.
So I’ve recently moved to Washington, D.C., and into a newish building. And I’ve been getting a utility bill with a rather large number being charged (on the order of $ 75 per month) for something called “HVAC,” or, heating, ventilation and air conditioning.
My inquiries into what this charge is for, and whether I can do anything to avoid it, speak volumes about the inefficiencies of our current energy system.
Turns out HVAC is calculated in the following way. There’s a total HVAC value for the building, and then an algorithm is used to apportion a supposedly fair fraction of the bill to each resident. The algorithm centrally takes into account 1) square footage of your apartment unit; 2) number of occupants. All of this is carried out by a sub-metering company, which then sends you the bill.
Let me acknowledge at the outset that I have no idea why things are set up this way–whether it is the choice of my building, or of some utility, or some other possibility. So I’m not laying blame. But I am interpreting the consequences of the arrangement–because as far as I can tell, the consequences are that there is absolutely no incentive for anybody in the building to save energy.
In fact, the incentive is probably the opposite–to blast cold air all the time. After all, you’re not really paying for it–your neighbors are.
In my case, I have a unit that gets no direct sunlight, so that even in this hot DC summer, the temperature remains about 75 degrees on average. Mostly, that’s fine with me, and I rarely use A/C. Furthermore, I travel a lot, and I turn everything off before I leave. So there will be a week or more at a time when there is no air conditioning at all being used in the apartment.
Up until now, then, I’ve been acting as a conscientious energy saver–a perfect little tree hugger. Up until now, I knew nothing about this HVAC business, or that my greenish behavior would have little to no effect on a key component of my energy bill.
But now that I do know, the question becomes, why be green? Heck, I’m tempted to start cranking the A/C. Everybody else in the building is, apparently. I’m no economist, but doesn’t this sound a bit like the tragedy of the commons scenario?
In fairness, I probably get a little bit of cooling from the A/C use of the other apartments, even if my A/C remains turned off. That’s probably worth taking into account. And maybe I’ll want more HVAC in the winter than I do in the summer, due to my lack of sunlight (though I doubt it).
Still, I don’t think these considerations outweigh the fundamental inefficiency and perverse incentives of this situation.
Now multiply my experience by the number of people living in buildings employing a similar sub-metering scenario (I have no idea how many there are, but somebody out there does). My guess is that you will end up with a very large inefficiency and dysfunctionality in our energy economy–a lot of waste, and a lot of discouragement of energy conserving behavior.
Smart metering, anyone?