Smart Meters – The Smart Choice?

By: Elizabeth Dolge

Smart Meters have been making the news of late stirring up much debate as to whether they will deliver the consumer benefits utility companies claim.  On one hand, they represent a possible step toward energy transparency and efficiency that if successful, could result in billions of dollars saved in US energy bills over the next 10 years.  The reduction in energy use via the help of smart meters could also represent a savings in emissions – some report the equivalent of removing millions of cars off the road.   Critics cry foul citing that energy bills have risen substantially for some customers enrolled in smart meter programs.  There are also concerns that consumers will have to carry the cost for the meters boosting monthly electric bills even higher.  Add to that privacy issues regarding energy use, automated disconnection, and lack of in-home monitoring devices with smart meter roll outs and the criticisms seem to mount.  Where does the truth lie?  What can consumers expect from smart meter programs?

For those of us living in the Bay Area, rollout of smart meters seems almost inevitable.  In an April 2010 report, PG&E expects to reach “full deployment” by 2012. A Wall Street Journal article states that “the majority of homes in California and Texas, the two most populous states, will have smart meters by 2013”. Transparency and value lie at the heart of the matter.  In comments to the DOE made on 7/12/2010, the Consumer’s Union states “smart meters and consumer feedback need to provide promised savings.” Addressing a major concern of many facing a smart-meter rollout, the report encourages both regulators and utilities to be honest when reporting actual savings to the consumer.  “If a utility can not prove consumer benefits are assured or smart meter rollout is a consumer cost, then rollout should not hide behind consumer benefit language.”

Therein lies the challenge when trying to assess the value of smart meter programs.  Actual data is nearly impossible to find.  Some say backlash from both consumers and consumer advocacy groups have prevented PG&E from making specific savings claims.  PG&E includes data from the DOE (Department of Energy) on their website stating, “According to the DOE, an integrated “Smart Grid” would save an estimated $36 billion annually by 2025 in terms of energy-efficiency gains, greater use of renewable energy and distribution generation.”  However, any amount saved directly from the use of smart meters is not to be found on the PG&E website.

Among those calling for independent investigation into the accuracy of smart meters prior to any further deployment is San Francisco Attorney General Dennis Herrera.  A San Jose Mercury News article  reports Mr. Herrera asked state regulators for a ban on PG&E’s smart meters until independent audits were complete.  As reported on their site, PG&E currently installs over 15,000 smart meters daily.  In his filing with the PUC, Mr. Herrera states, “Receiving a timely and correct bill from PG&E is the least a customer is entitled to expect…. Customers should not be in the position of wondering whether their bills are accurate or whether the equipment installed by PG&E is working properly.” According to this article, Mr. Herrera’s petition was awaiting review and decision.  My further search efforts suggest this is still the case.

In their report on 7/12/2010 to the DOE’s Office of General Counsel, the Consumers Union and the National Consumer Law Center make salient points and suggest steps be taken prior to large-scale smart meter rollout.  Among the steps proposed, making smart meters and time of use pricing voluntary – thereby making the program more appealing to consumers and protecting those for whom the program is not cost-effective citing low-volume users. Increased flexibility in the program to accommodate low-income, low-energy users and those with special medical needs is also included.  Health and safety reviews and home visits are suggested even if the program enables instant/remote disconnection. The report promotes consideration of the smart grid first.  It argues that if the utility has not made cost-effective and necessary upgrades to its operations and infrastructure for a smart grid, rolling out smart meters is premature. Privacy is addressed, urging that energy uses and patterns of individuals need to be protected from both for profit interests and criminal uses. The report concludes with an actual list of questions to regulators when considering smart meter programs entitled, “Key Questions Regulators Should Ask Prior to Smart Meter Approval”. The list gets at the tough questions including asking if rollout is needed as well as are consumers paying more or less than they have in the past and the distribution of costs and benefits among income levels.

Proponents (the DOE and PG&E) cite consumer access to real-time data (through use of smart meters) would result in a savings of up to 15%. Provided reduction is achieved in all homes by 2020, they claim this would result in 35 million cars off the road or the removal of 50 large coal power plants.  Furthermore they estimate savings of 46 billion a year on US energy bills with the average customer savings totaling $360/year. While it’s easy to feel invigorated by these claims, a more balanced approach when it comes to smart meter use and rollout seems prudent.  Consideration of the points made by the Consumers Union in the report cited above seem wise, ensuring the protection of US utility consumers while still encouraging a “smarter” rollout of smart meters going forward.  As for the future of smart meters in the Bay Area, one has only to consult the PG&E website to verify the installation schedule in one’s own residential area.  I’m left wondering if any pending judgments like the one filed for San Francisco by Dennis Herrera will impact PG&E’s deployment plans as well as what effect a smart meter will have on my own utility bill.

Elizabeth Dolge (Betsy) has been working in and with Brazil in various capacities since the mid 90’s.  Now a freelance writer/researcher based in Marin, her mission is to help clean tech companies grow forming strategic relationships both here in the Bay and in Brazil.

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