Are Utilities Ready for Smart Meters?

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.

RP Siegel

RP Siegel, author and inventor, shines a powerful light on numerous environmental and technological topics. His publications include business and technical articles as well as books. His third, co-authored with Roger Saillant, is Vapor Trails, an adventure novel that shows climate change from a human perspective. RP is a professional engineer - a prolific inventor with 52 patents and President of Rain Mountain LLC a an independent product development group. He is also active in his community of Rochester, NY. A regular contributor to Mechanical Engineering magazine, RP recently returned from Abu Dhabi where he traveled as the winner to the 2015 Sustainability Week blogging competition.. Follow @RPSiegel on Twitter. Contact: bobolink52@gmail.com