Life and vacation have gotten in the way of blogging recently. Nevertheless, the ideas keep turning, so long as Bacon has a keyboard nearby.

While catching up on my reading, I came across a post at Knowledge Problem on “smart meters,” which might soon be making a widespread appearance in Pennsylvania, if Gov. Ed Rendell has his way:

A key element of his plan would require all the state’s utilities to install computerized “smart meters” in every customer’s home or business, so that all electricity users will be able to see the real cost of power at peak-demand periods.

Some customers could volunteer for so-called “demand-side management” programs, which might allow their utility to power-down their air conditioners when temperatures soar while they are at work.

Others might choose “time of day” pricing and manage their consumption as cell phone users manage their minutes. Even in the summer, power demand dips low enough overnight that electricity often costs just a few cents per kilowatt-hour.

A PJM staff study found that demand-side management saved electricity users $650 million during the first week of August 2006, when demand soared. On Aug. 2 alone, it said, voluntary cutbacks in usage saved $230 million.

The cost? PJM said payments to customers who curtailed usage, which are pegged to the hourly clearing price for buying spot power, totaled $5 million for the week.

“The key is that small reductions in peak demand produce large reductions in peak price for all customers,” Hanger said. “Every customer benefits, whether they are shifting demand or not, because the whole market price falls.”

Cost transparency is a good thing, particularly when it gives consumers more control over the purchases (in this case, electricity).

Will we see smart meters in Virginia any time soon? I won’t hold my breath.