Smart skeptics

Consumer advocacy groups voice concern

Published In: Intelligent Utility Magazine November/December 2009

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IN SOME CIRCLES, PUSHING SMART METERS MAY END UP BEING DUMB policy. But a wave of public relations is now drowning out the skeptical voices necessary to ensure that the public does not get bamboozled, some consumer advocacy groups say.

The essence of this argument is that smart meters capable of reaching inside homes and adjusting energy consumption have yet to bear fruit. And if they are unable to do so, it would be consumers who pay for any failures.

"The concept that customers can reduce load on peak days and pay less is solid," said Bill Fields, senior advisor, Maryland Office of People's Counsel and chairman of the electricity committee for the National Association of State Utility Consumer Advocates (NASUCA). "That's been going on a while. It is a question, however, of whether the advanced meter initiatives are the most cost-effective way to accomplish that. We have proven methods already. What more does it achieve for us to do advanced meters?"

Consider Baltimore Gas & Electric, which plans to replace meters with long life spans that have not yet fully depreciated. The job will cost around $500 million and consumer advocates are unconvinced of the professed benefits. Beyond the high price tag, they say the utility already has a cycling program whereby it can turn off air conditioners during peak hours.

Consumer advocates say that state utility commissions are under increasing pressure to enact smart grid programs with an advanced metering component. It's especially true now that $4.5 billion in federal stimulus monies is being made available to valid projects. Fields said that commissioners must exercise restraint, noting that rushing headlong into something that is unproven and so expensive might later be regretted.

ELECTRICITY FLOW
The architects of the intelligent utility do not necessarily disagree with
the concerns raised by some of the consumer advocates. But they say that a key distinction must be made between the smart grid and smart meters.

According to Ray Gogel, president and CEO of Current Group, enhancing the "middle mile" between the generation source and the home has added significant value. Technology that analyzes electricity flow, for example, can increase reliability and diminish volatility by allowing utilities to pinpoint overloaded transformers and thereby avoid power outages.

The verdict on the "last mile," or from the meter into the home, is still out, said Gogel. If smart meters are to work, utilities must get consumers to interact with them.

"Most of the value will come out of the middle mile," said Gogel. "It's still too early to tell whether the 'last mile' will pay off."

Consumer advocates would agree with that assessment. Charlie Acquard, NASUCA's executive director, said that upgrades to the transmission system intended to improve efficiency and accommodate more renewable energy are wise. But investments in new meters may be akin to "shiny new toys" that amount to nothing more than false promises.

"Smart meters can be costly and we do not know how consumers will respond to them," said Acquard. "We want to see how cost effective they will be when compared to the current technologies."

Modernizing the transmission grid is generally considered necessary to increase reliability and to deliver more green energy. But speculation on smart meters per se is less popular and even worrisome. It's particularly true among some advocacy groups who feel that consumers may fare better by conserving energy the old-fashioned way.

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