A Device to lower your electricity bills?

I was at SITEX today, wondering around the endless booths selling all kinds of computer related stuff. Then I found this little booth selling a device that claims to help you lower your electricity bills.

Out of curiousity, I asked the saleman how it works. He happily explained to me that the device is actually a capacitor, and it helps to smooth out the current surge in the supply line from the power company. He also showed me some actual electricity bills to prove the effectiveness of the device.

I never liked power engineering during my university days, but the whatever little knowledge that I can still remember doesn't make me believe that putting capacitors to the supply line will improve your electrical applicances' efficiency. I do agree that putting a good capacitor will smooth out current surge, your supply will be more 'clean' and stable. It may also improve on the power factor (which may help to improve efficiency).

I voiced out my doubts to the saleman. The poor saleman, who is not from electrical engineering background, had a hard time. I didn't want to embarrasse him or make life difficult for him, just that I wanted to learn. At the end, he told me the device will not be effective if your monthly electricity usage is low.

Judging by the number of people who came to enquire about the product, looks like products that have good efficiency will be in higher and higher demand in the not to distant future....