« Back to Home Page

Sign up for the 3p daily dispatch:

Are Utilities Ready for Smart Meters?

RP Siegel | Wednesday March 17th, 2010 | 15 Comments

The rollout of the highly touted Smart Grid ran into another buzz saw this week, this time in Texas, when  hundreds of consumers showed up at a town hall meeting, and the Grand Prairie City Hall, in the Dallas-Fort Worth area, complaining that their recently installed wireless Smart Meters were responsible for higher electric bills. That led state senator Troy Fraser to get involved, asking the Texas Public Utility Commission to halt installation of the meters and to initiate an investigation.

The meters were installed by the Texas utility Oncor Electric Delivery,  which services roughly three million customers in the area. The company has installed nearly 800,000 of these meters and insists that they are highly accurate. They are now running a side by side verification study, where smart meters have been installed alongside the previously used mechanical meters and show little difference thus far.

That doesn’t placate folks like Tricia Lambert, one of the hundreds who have complained, claiming, “My bills average between 1,500 and 2,000 kilowatt-hours, and it goes up a little more in the summer,” she said. “That’s pretty much where I stayed. The first month with the smart meter was 4,383 kilowatt-hours.”

In some cases, like that of John Colbert, there were errors made by meter readers. An audit of his meter found that the smart meter was off by about 2000 kWh. Apparently, the meters are not read automatically. “Any time you’ve got humans involved in the process, there’s always an opportunity for errors to take place,” said Oncor spokesman Chris Schein.

This experience closely parallels an earlier story in Bakersfield, CA, where PG&E customers voiced similar complaints. Bakersfield residents believe their new smart meters are malfunctioning because their bills are much higher than before and they have filed a class-action lawsuit against the utility.  An independent evaluator will be appointed by the California Public Utilities Commission some time this week.  PG&E claims higher bills are due to rate hikes, an unusually warm summer, and customers not shifting demand to off-peak times when rates are lower. Likewise, in Texas, this past winter was unusually cold.

Andrew Tang, senior director of PG&E’s Smart Energy Web, says the rate hikes were targeted at the upper tiers of power usage – specifically those who used more energy within the billing period.  Bakersfield is located in the California desert and temperatures frequently hover around the century mark and never drop below 85 degrees on summer nights. It’s a little hard to see how Smart Meters can save money in that scenario, since the promise of savings lies mostly in the idea of shifting discretionary power consumption to off-peak periods when the rates are reduced under some kind of Real Time Pricing scheme. But if it’s hot around the clock, and you’re home all day, then it’s hard to find a time to turn down the AC. Of course, that’s not allowing for creativity.

There are obviously several facets to this problem. First, there are undoubtedly glitches in the system, where meters have malfunctioned or human errors have caused homeowners to be billed incorrectly. These need to get ironed out quickly. There is no reason why wireless digital meters should need to be read manually.

Secondly, there is the question of how have the utilities implemented the real-time pricing structure. Are they nominally the same, offering consumers the ability to reduce their bills below previous levels by doing laundry and running their dishwashers late at night? Or do customers have to go to extraordinary measures, just to get their monthly bills down to what they used to be?

The mechanism behind the cost reduction that the smart grid promises to deliver is to save energy by reducing or eliminating the need for inefficient peaker plants. What’s most important in achieving this is the relative price levels between the peak and non-peak periods of operation. But what matters most to consumers are the absolute levels, which will determine the amount of their monthly bill. So, for example, if I’m paying twelve cents for a kWh now, will I pay four cents for off-peak and twenty cents for peak? Or will I pay ten cents for off-peak and fifty cents for peak? That information was not disclosed in any of the stories above, although in the Bakersfield case, PG&E did admit that there was a rate hike simultaneous with the meter rollout (probably not such a great idea).

Finally, there is the question of communication. This is a more complicated deal than just getting a bill in the mail once a month and paying it. There’s more interaction, more participation by consumers in the system now. And most people don’t even know what they’re dealing with.

A recent Harris Interactive poll found that 68% of respondents have never heard of the Smart Grid. Furthermore, 42% believe it will increase the cost of electricity.  And yet 67% said that if they could see how much electricity they were using they would be more likely to reduce their usage.

A report from research firm IDC Energy Insights, and sponsored by telecom firm Telus, finds that utilities “have not thought through the implications of new technology and products on customer relationships or the business process.” In other words utilities are not at all prepared for the increased amount of communication, education and interactivity that will be required from installing new smart grid technology.

PG&E will finish installing 8 million smart meters by the end of this year.  Currently there are no in-home energy management displays or dashboards accompanying the new smart meters.  Customers have no way to know how much their energy usage is costing in real time.  The utility does have plans to install these in the future.

In a way, it’s a bit like selling people expensive plug-in hybrids without explaining to them that they have to plug them in at night, and then wondering why people are angry with this technology that is so obviously great at saving energy.


▼▼▼      15 Comments     ▼▼▼

Newsletter Signup
  • Dan_DHRT

    “And yet 67% said that if they could see how much electricity they were using they would be more likely to reduce their usage.” Yet, if people have to take action regularly to see how much they are using, they simply won't.

    There are much simpler devices which are much easier to use and let users see how much electricity they are using without having to do anythin beyond the simple initial setup.

    http://dailyhomerenotips.com/2009/11/18/using-b

    This electricity monitory device we use in our own home. Every time we walk by the display unit we see exactly how much electricity is being consumed that very minute as well as how much it is costing us based on our own electrict utility's rates.

    It costs just over $100 and we installed it ourselves.

    Much simpler and IMO more effective.

    Dan

  • http://www.earth2017.com/ Bill Roth

    Great article RP. I just posted a tweet with a link back to this article. My own experience with the installation of a smart meter by PG&E is that the word PRICE was never mentioned in their one page letter notifying me that the meter had been installed. Customers hate surprises and the early start of smart metering is explaining this reality the hard way to our utilities. I like Dan's comments, if the utilities are unable to structure effective outreach then this creates a huge opportunity for free enterprise to offer cost effective solutions.

  • http://www.bluelineinnovations.com/ Peter Porteous

    Visibility into real time electricity consumption is the critical first step in behavior change and usage reduction. Real time visibility and awareness should also serve to diminish some of the end of month billing “surprises” by homeowners. Real time data helps the family better understand exactly where/when the uses/costs are being incurred in the home, the costs associated with specific appliances or actions and more importantly equips the family with the information to take action to reduce consumption and cost. Extensive utility backed and independent research confirms that most homes using the PowerCost Monitor can experience annual savings of up to $250 per year.

    These are very positive steps forward….but it can't be passive, engagement by the family is key to behavior change and electricity consumption reduction. It all starts with arming family members with the right information.

    http://www.bluelineinnovations.com

    Peter Porteous
    CEO
    Blue Line Innovations

  • jimhemsell

    Wireless energy monitors are the way to go to check up on your smart meter.

    Product like the ENVI at http://www.savinguenergy.biz are easy to inexpensive, install to install and records your energy use every 6 seconds. The base unit stores up to 7 years of records. They have Commercial and residential units. A single desktop base unit can record up to 10 seperate electrical services. Great for apartments that have electrical bills includes with the rent.

    Take control of your energy use and bills today!

    Jim Hemsell

  • http://twitter.com/everardtx Everard Santamarina

    I don't agree with “The mechanism behind the cost reduction that the smart grid promises to deliver is to save energy by reducing or eliminating the need for inefficient peaker plants.” Shifting demand is only part of the promise of Smart grid initiatives.

    A Smart Grid means savings thanks to A) Better information on grid usage. The more sophisticated information provided by the Smart Grid can be used for forecasting and conveying better information for generation dispatching conservation. B) It potentially will allow for new products and services, including load shaping and time of use products. C) Other innovations like enabling Pre-paid usage, that has been found to be quite effective for people to monitor their electricity. D) A Smart Grid allows for more efficient response times to outages since meter information is used to pinpoint outages in the power grid. E) Enables devices for in home use that will allow consumers to respond programmatically to demand response signals and make choices around how badly they want to air condition their home during brown out emergencies. We would love to see quantitative data on these sources, but from personal experience we know these value sources exist beyond merely peak shaving.

    It does sound like PG&E’s implementation left a lot to be desired, however, it is highly unjust to lump Oncor’s efforts in with PG&E; Oncor is doing a relatively good job. The Texas Utility Commission of Texas (PUCT) efforts highlight the amount of communication and due diligence that's gone on in Texas. The initiative in Texas is taking a much more holistic approach to realize the benefits (potentially because it is being carried out in predominantly deregulated areas). Before they have to go purchase an in home device, consumers have access to a website that allows them to download their usage within two days of it being recorded so they are cognizant of the 15 minute intervals of their usage.

    Unfortunately, the implementation coincided with very cold weather and the meters are being unjustly blamed by consumers for their higher bills.

    One last note: In home devices that don’t supply any of the benefits of a smart meter may help consumers lower their usage, but it's a discretionary purchase that an insufficient number of people will pay for to realize material savings over current consumption.

  • intimallku

    A few facts:

    1. About half the smart meters in Bakersfield were installed by July-August of 2008, and the second half was installed after July of 2009. At some point it will be relatively easy to compare bills of customer with and without smart meters, facing the same weather conditions and rates.

    2. After the 2000 crisis, the California legislature has limited increases for lower usage customer (130% of the baseline amount or energy budget) and for customer on the low income assistance tariff. All of the rate increases since 2000 have been piled on usage at higher level for customers who are not on low income tarffis. As are result, the relationship between usage and bills is not linear, but exponential. Regular usage is at roughly 11c per unit of energy (kWh), while high end usage is at 44c per unit. A 50%increase in usage, which is very common over the summer, can more than double regular bill.

    3. Over 35% of Bakersfield customers are on the low income assistance rates. Eligibility changes over time as folks get jobs or promotions. A high usage customer that switches from highly subsidized low income tariffs (oddly, enough the subsidy is bigger for energy hogs) can face a bill quadruple the size without chaging energy usage. Again, this all rests on the CA legislature, consumer advocates, and, partly, on PG&E.

    4. Smart meters are regularly tested for accuracy and all published test indicate they are more accurate than old meters. Old meters themselves are not always accurate. Undoubtedly some dead or slow meters will be replace.

    5. The number of official complaints is extremly low, in the hundreds, relative to the number of smart meter installed so far. Based on my last check, over 3 million gas smart meters are in place, and roughly 2 million electric smart meters are in place. The complaints are loud, thank to some good attorney PR, but they are few relative to the number of folks with smart meters.

  • freal

    Smart meters and the new smart grid are simply a means for utilities to better price your use so that you will indeed be paying more. Lets face it, time shifting is baloney. Are you going to have your morning coffee made in the afternoon? Or vacuum your hoyse at 2 AM – not likely. Utilities make money when we use electricity. The more we conserve the more they must charge users.

  • mgabriel1234

    I'm in PG&E territory but no smart meter yet. When you get a smart meter, do you automatically go to Time of Use service?

    Also, I seem to remember when the Bakersfield problem came out, that some of the people complaining about their Smart Meter had in fact never received one.
    The rate structure' s purpose is to drive high usage people to use less power, right? So if you get a large bill, you do something about it – not just complain. I know PG&E does free energy audits ( though I hear they are somewhat cursory).
    Personally, I won't need a Smart Meter to tell me to wash my clothes in the evening . How many high energy usage activities, not cup of coffee type activities, do homeowners do all day – 3? 5? – that they can't tell when to do them in the evening if they can? If you can't figure that one out, I guess you can't figure out how to insulate your house either.
    I think Smart Meters do a lot more than just give info to regulate your usage.
    Question – if you have solar and the state goes to a feed in tarriff where you get paid for your excess electricity, will the Smart Meter handle this or do you need to get a new meter? I hear that in Germany they have 2 meters – the goes in and the goes out – and get two bills. Does anyone know how this will work in CA when the feed in tarriff kicks in later this year?

  • GreenovationTV

    We're working on making our historic house the oldest net zero house in America. We've just started using Wattvision sensors connected to the GooglePower Meter to monitor our live energy use. We're sharing the live data on our website: http://www.greenovationtv.com/live-energy-use/ – We also just received a sensor from Black and Decker which they are retailing for only $99. So, folks with compatible meters will be able to get their live consumption as well as track their historic use.

    • brewster

      I did not see any info on your webpage.

  • Chris D Dunn

    This is an interesting event in Texas with so many people asking; how am I to pay this new higher smart meter electric bill. What is our government doing to its people, where is the regulation body to find a real answer for its; so called “American” people. As I see it play out in Texas, all I witness is our lower class people just got wiped out, our middle class just got hurt and our upper class well we all know they are recession proof. My bill in one month went from 100.00 to 800.00 and the inside digital thermostat was set on 68. Oncore yes it was cold in Dallas, but I had to put three layers of clothes on in a cold house with a 700.00 increase, WOW can you explain how this happen. I have requested your inspection 10 days ago and the bill goes on and on and you’re a no show. I would think this is a breach of contract direct to its customers. I am just wonder how are people not going crazy knowing deep down in-side that with this new smart meter technology, there could be a real mathematical issue with its new meter system, but really who does it benefit us the people or corrupt regulations that once again we the people by the people will again have to bail our own derriere out because mother nature got cold in Dallas Texas.

    • SmartWhat

      It sucks that this has happened to you – and as I say below, the utilities have done a horrible job of managing the smartmeter programs. But it isn't that there is anything wrong with smart meters themselves.

      It's also the case that many 'old' meters were actually working wrong prior to them being replaced- so in some cases the new bills are now reflecting accurate energy use on formerly broken meters.

      And to those who think its their god-given right to have cheap energy – I met with a VP at a almost 100% coal-powered utility in Kentucky who told me many of his constituents had 4000 sq ft homes in which they like to have the air conditioning blasting and windows open. They aren't paying for greenhouse gas emissions and the damage from the storms and climate change that is resulting — costs in the unimaginable thousands of trillions of dollars.

      Selfishness and laziness are the cause of a lot of heartache in this world — and unwillingness to put some insulation in your walls, turn off the air conditioning if the windows are open, and not deal with the cost of a 4000 sq ft home definitely fall into that category. No one is going to do this stuff until their pocketbook is hit.

      • Chris D Dunn

        From my standpoint the deregulated (TXU/ONCOR) Monopoly rules again in the state of Texas with its new emerging technology called the smart meter. With the thought of unexplained price increases by a digital meter outlet that now has become the artificial intelligence of real-time price modeling and or methodologies that were especially designed by a group of utility analysis and engineers backed by manufactures secret trade agreements has created a body of doubt and confusion by the open public. Thus, if regulation can increase prices by restricting competition (silly there is no competition on new emerging technologies that is installed, managed, and maintained by the smart meter delivery provider), either through a minimum price or control of entry and substitutes, there are potential gains for sellers, who directly purchase from the Texas utility (grid) now called a smart grid. I continue to wonder what other evidence is there that those who are regulated only want to be regulated by “Mother Nature” which is a potential breach of performance contract controlled by a “ACT of GOD” out- clause becomes the only excuse of higher demand pricing by its own pricing models. Remember on national TV the claim of cold weather with the input of its new emerging technology has created fear of having our heating and air condition turned off by not being able to pay an outlandish bill without representation of fact other than a silly comparison of old analog technology verse the new and improved smart digital meters which are now in the public domain that in some cases a possible 10 cents price difference per KWH all of this of course is not in favor of the consumer, but yet a direct gain to the Monopoly collective.
        I guess Mr. SmartWhat, since we saw this play out with the telecommunication companies (AT&T/Southwestern Bell) we should be not be shocked that ONCOR will once again become a smart non-deregulated TXU holding company with all of the profits coming now and much more in the upcoming years is a direct understanding of why the consumer looses and the new smart meter Monopoly gains. Haven forbid sir we the consumers are not blind to fact there is a real issue, possible not with the meter (yet suspect to me) but yet the direct gain of profit from the public that again has no choices in this smart meter installation.

  • SmartWhat?

    Suffice it to say that the PG&E management that were at least initially accountable for smart meter rollout were warned but oblivious to the importance of customer expectation management. The PG&E leadership thought about this as a technical engineering exercise; not as one in which they were going to have to design the roll out approach and work carefully with customers to achieve benefits and avoid the current backlash that is happening. PG&E saw this projects largely as a cost-cutting program, not as one focused on environmental benefit.

    Unfortunately I think this is a result of our countries' policy, and that of the state of California, of leaving the responsibility for consumer energy efficiency to utilities – who have no skills in designing and creating behavior change whatsoever. They are engineers. They know how to deliver energy, not how to encourage you to use less. And California is still way ahead of other states. Our governments and utilities commissions need to start facing political facts — we are going to have to start raising rates and offering both financial incentives and assistance for consumers to become more efficient. Its the only thing that's really been shown to work.

  • Chris D Dunn

    From my standpoint the deregulated (TXU/ONCOR) Monopoly rules again in the state of Texas with its new emerging technology called the smart meter. With the thought of unexplained price increases by a digital meter outlet that now has become the artificial intelligence of real-time price modeling and or methodologies that were especially designed by a group of utility analysis and engineers backed by manufactures secret trade agreements has created a body of doubt and confusion by the open public. Thus, if regulation can increase prices by restricting competition (silly there is no competition on new emerging technologies that is installed, managed, and maintained by the smart meter delivery provider), either through a minimum price or control of entry and substitutes, there are potential gains for sellers, who directly purchase from the Texas utility (grid) now called a smart grid. I continue to wonder what other evidence is there that those who are regulated only want to be regulated by “Mother Nature” which is a potential breach of performance contract controlled by a “ACT of GOD” out- clause becomes the only excuse of higher demand pricing by its own pricing models. Remember on national TV the claim of cold weather with the input of its new emerging technology has created fear of having our heating and air condition turned off by not being able to pay an outlandish bill without representation of fact other than a silly comparison of old analog technology verse the new and improved smart digital meters which are now in the public domain that in some cases a possible 10 cents price difference per KWH all of this of course is not in favor of the consumer, but yet a direct gain to the Monopoly collective.
    I guess Mr. SmartWhat, since we saw this play out with the telecommunication companies (AT&T/Southwestern Bell) we should be not be shocked that ONCOR will once again become a smart non-deregulated TXU holding company with all of the profits coming now and much more in the upcoming years is a direct understanding of why the consumer looses and the new smart meter Monopoly gains. Haven forbid sir we the consumers are not blind to fact there is a real issue, possible not with the meter (yet suspect to me) but yet the direct gain of profit from the public that again has no choices in this smart meter installation.

  • Pingback: All About Abalone Poaching and the Government Response | Latest Trends

  • Pingback: New UK Prime Minister Sets Example for Obama on Climate Change | Triple Pundit: People, Planet, Profit

  • Pingback: Ford Plugging Into Microsoft Hohm for Battery Management

  • Pingback: The Emerging Sustainable City Opportunity