Excerpted from The Class Warfare of Dynamic Pricing,  by Bob Gohn, on  the Pike Research Blog

Dynamic pricing for electricity has long been the holy grail of the smart grid, particularly for smart metering. The rationale is that if the retail price of electricity actually reflected the true time-based costs instead of a blurred monthly average, then consumers would become more efficient buyers, benefiting themselves, suppliers, the environment, and society. If we can choose to buy less during demand peaks when generation costs are highest, and buy more when the grid is underutilized, then overall electricity bills will go down, peak demand is reduced, and the associated environmental impacts are lessened. Everyone wins – so who’s to complain?

Well, quite a few consumer interest groups are complaining, ranging from the AARP to utility watchdog groups. While some complaints fit within the ongoing smart metering paranoia, there are legitimate concerns as well, including:

Low-income, elderly, and other disadvantaged groups may not be able to shift to off-peak use, and hence may face higher bills. Images of grandma turning off her oxygen, shivering in the cold or sweating out a heat wave because of smart meters are persuasive.

There is a general assumption that consumers will happily make “comfort vs. cost” tradeoffs in energy use. This is counter to the trend toward flat rate pricing elsewhere, including the telecom industry, heretofore the master of time-of-use pricing.

While there is little argument against “opt-in” dynamic pricing programs, most agree that dynamic pricing must be mandatory or implemented as an “opt-out” program to achieve the desired benefits. This muddles the message of enabling “consumer choice” via smart metering.

Underlying all these concerns is an assumption that for someone to win with dynamic pricing, someone else has to lose. The goal may be to reduce demand peaks and fill underutilized valleys, effectively lowering the average, but it is true that some will likely pay more with dynamic rates. The question is who?

Interestingly, opposition to dynamic pricing can be found on both ends of our politically polarized spectrum. Those toward the right fear Big Brother taking control of their thermostats and appliances (here, utilities = government). Those bent leftward see the social good of universal electricity being corrupted, leaving the vulnerable unprotected (here, utilities = big business). I am sure smart grid advocates would love to unite Tea Party and Occupy Wall Street folks, but not this way!

You  can read the rest of The Class Warfare of Dynamic Pricing,  by Bob Gohn, on  the Pike Research Blog. We  make only this observation – when uneven distribution of wealth is so extreme that the less-fortunate suffer morbidity and mortality for want of adequately efficient shelter, protection from extremes of temperature, the unevenness of that wealth distribution – it matters not whether we’re talking about housing stock and its efficiency, or energy to heat or cool it, we are inclined to set aside ideology, and find ways to insulate houses, provide clean and warm clothing and food, and prohibit energy companies from executing non-payment shutoffs absent a court order. We can then discuss ideology, or yell at each other, or do what passes for political discourse these days – later.  If this makes me intellectually dishonest, I’ll take the  weight for that.