Smart meters and customer complaints

Readers weigh in on why frustration continues

Phil Carson | Aug 02, 2012

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"One Customer's Frustration" really rang a bell with readers, even as the torrent of commentary on the blackouts in India continued to ring my bell. 

It's funny. Everyone seems to want to move beyond talking about smart meters and the customer, but we can't because once the conversation moves from passive "ratepayers" to "customers," with all the expectations, savvy and potential power that implies, you've got a tiger by the tail. 

In any case, Monday I featured the concerns and complaints of a customer of Oklahoma Gas and Electric. Please see the original column for his full viewpoint. Suffice to say here, in setting up reactions from our readers, that the gentleman complained that he knew how to save energy, he didn't need an expensive smart meter for that task. He expressed hesitancy in believing what OG&E is telling him about the accuracy of the meter technology, noting issues elsewhere. He believes that OG&E will seek to hoodwink its customers by imposing mandatory dynamic pricing. And the whole kit and caboodle is being forced on him. 

Enter: our readers. 

"I'm afraid that AMI got the cart in front of the horse as far as many consumers are concerned," wrote the first correspondent on Monday. "I suspect paying these surcharges [for meters] would be a lot easier if [consumers] had been consulted before utilities committed dollars on their behalf (choice) and then if they had a means to adjust their consumption to meet their own sense of balance, between cost, comfort and convenience (control). 

"I suspect many would feel less aggrieved than they do now. With more emphasis on collaboration and consultation with the end users in this system, I believe we will begin to see our way through to a future with more balance and harmony."

The next correspondent had less sympathy for consumers who don't "get it." 

"It bothers me when customers insist they have no choice when it comes to electricity," this writer wrote. "They most certainly do have a choice. They can buy power from a vendor or they can generate their own. Electric utilities are constantly bombarded with regulations on everything they do. I think there should not be an opt-out program for [meters]. The benefits of going to smart meters are incredible. And they are just the beginning of the technological revolution that is taking place for the power industry. It is absurd that people who are buying power get to have a direct say via regulation on what type of meter their power company will use."

Another faithful reader, Milton Scritsmier in Boulder, Colo., simply reviewed the basic facts in the case for the record. 

"It's a simple reality that it costs utilities more to generate power during peak periods," Scritsmier wrote. "To meet peak power needs they have to maintain expensive reserve capacity that sits idle at other times. Thus it's totally justified that utilities install smart meters and price higher during times of higher demand. It's just an accident of history that the technology wasn't able to do this before. Back when it actually cost money to make a long distance phone call, pricing was based on when you called as well as for how long. Everybody accepted that.

"On the other hand, does the utility need to know exactly what the consumer does with the power he or she consumes any more than the phone company needed to know what you were talking about? Once the consumer knows the price, he or she is fully capable of making usage decisions and scheduling use of major appliances. As a result, I think the best compromise is that smart meters should stop at the wall, and not reach into the house."

Jack Ellis of Tahoe City, Calif., added a dash of "what's in it for me." 

"Your correspondent [in the original column] apparently doesn't understand how the combination of an interval meter and time-based pricing means the financial benefits of doing what he would do anyway accrue to him rather than continuing to subsidize the habits of other consumers," Ellis wrote. "Of course, as you pointed out in your response, the most important reason for time-based pricing is to encourage changes in habits and capital investments on the consumer side of the meter (that could be as inexpensive as a whole-house fan) to help shift demand out of the peak periods—critical in California, where current annual load factors are in the low 50 percent range and continue to decline."

Another correspondent echoed what many in the industry have said to me, typically off -the-record. 

"In the rush to snag ARRA funds, far too many utilities neglected to sufficiently sell the benefits of smart meters to the most important constituency—their customers—or to provide the tools for their customers to reap tangible benefits once they were installed. It's no surprise there's been pushback."

Phil Carson 
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com
303-228-4757

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Comments

Why consumers like time-based pricing

Consumers are surveyed all the time, and from 40 to 80% of them say they want the choice of time-based pricing.  Why?  Because it allows them the choice of not paying for high cost on-peak power.  Without such rates, every customer has to pay for on-peak power, whether they use it or not or want to or not.  With voluntary opt-in time-based prices, those customers who want to reduce their on-peak use, or use less in the first place, can take advantage of lower cost off-peak prices.  This helps not only them, but also the customers who remain on non-time-based rates, because lower peak translates into fewer power plants needed, which means lower overall system costs.  And customers are voting with their feet: around 40% of residential customers participate in voluntary, opt-in time-of-use rates in Arizona.  Time-based rates should always be voluntary - but they customers should have the choice to save money, reduce system costs, and help the environment - if they want to.

Some considerations that are missing

The end game for smart metering appears to be time of use pricing to force customers to use less electricity during peak hours because the price of that energy will be high.  What is not considered I believe is that there are folks that will be heavily impacted relative to their ability to pay and their need for the power.  Let's say there is a family with a stay-at-home parent and young children, toddlers and an infant or even twins and the working parent is not in the upper echelon of pay.  What are they supposed to do--turn off the a/c in summer or the heat in winter between noon and 8PM?  I can pretty much guarantee an increase in infant mortality and possibly child mortality.  What about the elderly retired persons in the same situation--they are at home all day, generally.  Are they supposed to do without heat or a/c depending upon the season?  Or, maybe they are supposed to invest in say geothermal HVAC systems?  I wonder where they will get the $30,000 grand?  Or maybe they should invest in rooftop solar PV--only thing is solar PV is already losing output badly when the actual electrical peak hits.

Just where do proponents of time-of-use billing think the biggest burden will fall?  Large industrial users generally have PPAs, so their electrical price is steady around the clock and usually based on costs of running baseload powerplants.  Time-of-use pricing will shove more and more of the cost burden to businesses and residential customers.  Businesses can shift their costs by changing hours to get further away from peak pricing but the parent with infants cannot have their children stop living from 2 till 8PM then resume living after that.  Nor can the elderly do that.  These groups and businesses that depend on their customers stopping in on the way home from work to pick up household items, groceries, etc will bear the burden.  Struggling young families will struggle harder to pay the increased costs and the fixed income elderly will have to give up something--either some of the food they eat or their medications to pay the increased costs.

It is known for a fact that electrification has improved the lifestyle and longetivity of millions of people but now, we want to reverse that for what good purpose?  Combating global climate change predominantly caused by manmade CO2?  That is a theory, backed only by computer models built with manipulated data.  The climate has changed constantly in the history of the world--long before man ever discovered fire--heck, long before man existed.  There is no doubt, mankind has influenced climate change but climate change can be adapted to without increasing infant and elderly mortality by depriving them of the benefits of electrification through pricing.

Mark Wooldridge