Pennsylvania Regulators Halt Expensive "Smart Meter" Plan

In a wide ranging overhaul of laws affecting electric utilities and their duties in a “restructured” system that allowed utilities to form holding companies, sell off power plants, and rely on markets to buy electricity for customers, the Pennsylvania legislature enacted “Act 129“, signed by Gov. Ed Rendell on October 15, 2008. Among other things, Act 129 required utilities to acquire electricity for customers at least cost (rather than rely on the deregulated wholesale spot market rate as some had urged should be done under prior laws).

Act 129 also embraced the idea of replacing existing meters with “smart meter” for all electric utility customers. The law required the major electric utilities to file plans with the Pennsylvania Public Utility Commission (PAPUC) for installation of “smart meters” and for making “time of use” and “real time pricing” available to all customers, upon their request.

West Penn Power Company d/b/a/ Allegheny Power Company (a subsidiary of the Allegheny Energy holding company), filed a plan to implement the “smart meter” requirements of Act 129 on an expedited basis for 93,000 customers in 2010. The PAPUC, however, held it up for further review, when the cost of the proposal to consumers became apparent:

An administrative law judge urged the PUC to stall implementation until he reviews Allegheny Power’s plan by Jan. 29. The commission agreed.

Opponents of Allegheny Power’s plan welcomed the delay.

“We had opposed the expedited filing; we felt they were trying to put smart meters into place very quickly, while all other electric utilities were using the 30-month grace period,” said state Consumer Advocate Irwin “Sonny” Popowsky.

Popowsky said he opposes the costs Allegheny Power would impose on customers. According to the company, all customers beginning in February would pay a monthly surcharge of $5.86, which would increase to $14.34 a month by June 2011, $15.57 a month by June 2012 and $15.77 each month by June 2013.

“At $15 a month — that’s a massive rate increase for consumers,” Popowsky said.

Rick Stouffer, Allegheny Power’s Smart Meter Startup Delayed, Pittsburgh Tribune-Review, October 29, 2009.

This is yet another illustration of how massive “smart meter” deployment touted by deregulators and many utilities nationwide is running into resistance when the sketchy putative benefits of “smart meters” are weighed against the large, real costs of installing them for every customer. Adding another $5 to $15 to monthly utility bills to indulge state and federal deregulators — who fantasize that exposing small customers to extreme spiking prices in deregulated spot markets will stimulate a “demand response” to control unregulated prices, avoiding the necessity of rate filing, rate review, and fixing of reasonable rates — is unconscionable. See Consumer Uprising Against California Smart Meter Program, PULP Network, October 28, 2009; PSC Requires More Study Before Allowing Major Investment in “Smart Meters”, PULP Network, January 11, 2008;

Proponents of expensive “smart meter” deployment and “real time pricing” schemes seem to have little appreciation of the hardships faced by the substantial segment of the population living without significant savings, from check to check. Their fixed incomes do not fluctuate with spot market prices; indeed, they often run out of money at this time of the month and are going without necessities, falling behind in utility bills, and looking for help at food pantries. In New York state last year, utility service to 330,000 customers was shut off due to their inability to pay bills, affecting about one million people. Adding to the bills of economically vulnerable utility customers will only aggravate this situation.

Those who advocate expensive measures such as “smart meters” in the name of energy efficiency and the environment should be required to take into account the potential impact of higher prices on vulnerable human populations in required environmental impact statements. Also, they should examine more closely cost effectiveness and environmental impact of the latest price-raising environmental “solution.” If “smart meters” actually worked to shift significant electric loads away from peak hours when natural gas turbines add output to meet the demand to off-peak hours when more coal might be burned, they could cause more carbon emissions. See Not so Smart? High Tech Metering May Harm Low Income Electricity Customers, PULP Network, April 16, 2007.

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