The latest utility fad is large capital investments for massive deployment of so-called “smart meters” in residential homes. The “smart meter” hype is coming from utilities, marketeers, and some greens, but it is not something consumers are seeking. Indeed, any consumer who wants to pay different rates based on when they use electicity can do so by calling the utility and asking to switch to time of use rates. Very few do.
The devices are promoted on various theories, such as that they will
- address the unreasonable deregulated wholesale electricity prices set in ISO and RTO spot markets without effective FERC regulation by exposing customers to extreme high prices on hot days in order to facilitate their “demand response” of turning off air conditioners,
- reduce costs for meter reading and disconnection of service for nonpayment, using electronic communication with the meter,
- provide meaningful real time, usable information to customers about their usage and costs, and
- encourage conservation and improve the environment
As H.L. Mencken observed:
there is always a well-known solution to every human problem — neat, plausible, and wrong.
Researchers at Carnegie Mellon looked at the cost benefit of smart meters and have concluded that
today the optimal strategy is not to give every customer an expensive real-time meter, but rather to introduce them selectively to the larger more flexible customers.
M. Granger Morgan, Jay Apt, Lester B. Lave, Marija D. Ilic, Marvin Sirbu, and Jon M. Peha, The Many Meanings of “Smart Grid”, Carnegie Mellon University, Department of Engineering and Public Policy Briefing Note, July, 2009.
Similarly, others who have taken a hard look at utility claims of cost effectiveness of universal “smart meter” deployment have found them to be spurious. See
- PSC Requires More Study Before Allowing Major Investment in “Smart Meters”, PULP Network, January 11, 2008; and
- Testimony of Consumer Affairs Consultant Barbara R. Alexander, linked in AARP Opposes PEPCO Plan for Spending on “Smart Meters”, PULP Network, June 19, 2009
- Michael Hawiger, Energy Savings Can be Achieved Without PG&E’s Disastrous SmartMeter Device, The Bakersfield Californian, September 21st, 2009, and
- Barbara Alexander, Smart Meters, Real Time Pricing, and Demand Response Programs: Implications for Low Income Electric Customers, 2007.
“Smart meter”deployment by California utilities is now running into strong consumer resistance:
More than 100 people packed a town hall meeting in downtown Fresno to vent their frustration with PG&E’s newest metering technology — SmartMeters — that customers say has led to faulty spikes in utility bills.
“The meters, in my opinion, are not very smart,” PG&E customer Joe Riojas told Senate Majority Leader Dean Florez, D-Shafter.
The meeting lasted 4 1/2 hours. No one spoke in favor of the SmartMeters.
Florez held the hearing at the Hugh M. Burns State Building amid concerns that the SmartMeter technology — funded largely by consumers — failed to deliver on promised savings.
Pablo Lopez, Crowd vents on PG&E meters at Fresno hearing
Customers at meeting say readings are faulty, Fresno Bee, October 21, 2009.
Another story illustrates how these rosy scenarios are not reality:
After Pacific Gas and Electric Co. installed one of the devices at her house this past spring, Shaughnessy’s monthly bills started to climb. In August, her bill hit $458. Throttling back the air conditioning didn’t help.
“I kept the AC at 85 degrees, to the point I had sweat running down my nose while I was inside my house,” said Shaughnessy, 44, who teaches junior high school. “Bottom line is, my bills went through the roof.”
Across Bakersfield, other PG&E customers experienced the same shock. And like Shaughnessy, they started questioning the SmartMeters’ accuracy.
PG&E now faces a revolt in Bakersfield over the SmartMeters, which the company has been installing throughout its territory since late 2006. Angry homeowners repeatedly booed PG&E representatives during a public hearing on the meters earlier this month. State Senate Majority Leader Dean Florez has demanded a moratorium on their installation. State energy regulators last week agreed to investigate the meters’ accuracy, although they stopped short of agreeing to a moratorium.
“People think these meters are fraud meters,” said Florez, D-Shafter (Kern County). “They feel they’re being defrauded. They’re getting no benefit from these things.”
David R. Baker, Customers say new PG&E meters not always smart, San Francisco Chronicle, October 18, 2009.
As summed up by Mark Toney, Executive Director of TURN, a leading California utility consumer advocacy group:
Smart meters, a cornerstone of the smart grid that we hear so much about these days, are a prime example of an unnecessary and expensive change that will have little impact on global warming.
So far, the meters have struck fear in the hearts of consumers concerned about their privacy (because they transmit data on individual electric use), have already cost utility customers more than $2 billion (spent by the California Public Utilities Commission to launch the program) and are blamed for inexplicably higher bills in California’s Central Valley. These high-tech, high-cost new devices were supposed to connect us all to our electric company, our appliances and the fight against global warming. So far, they’ve missed the mark on all three counts.
Mark Toney, Smart Consumers Trump Smart Technology, San Francisco Chronicle, Oct. 23, 2009.
In New York, National Grid requested a large ARRA federal economic stimulus grant to subsidize a proposed ratepayer-funded smart meter pilot project in its Niagara Mohawk service area. The New York PSC promised to make ratepayers pay half the cost if federal stimulus grants were given, and had kept the cost details of National Grid’s proposed project secret. See Niagara Mohawk Allowed to Keep Cost of “Smart Grid” Proposal Secret, PULP Network, September 11, 2009.
Yesterday, the federal government denied National Grid’s request. See Larry Rulison, Saratoga County project shut out of federal smart grid funding, Times Union, October 27, 2009; Tim Knauss, Lack of federal funding means no smart grid for Syracuse, The Post-Standard, October 27, 2009.
Perhaps denial of the federal grant to install “smart meters” was a good thing, in that the federal dollars may go to more cost effective uses, ratepayers will not be made to pay more for the experiment, and Niagara Mohawk customers are spared from paying for costly human experimentation on how much more they could be made to pay for energy and how they would react to unreasonable spiking prices. See Not so Smart? High Tech Metering May Harm Low Income Electricity Customers, PULP Network, April 16, 2007.