Smart Grid trials swapped old meters for Smart Meters.
Smart Grid trials swapped old meters for Smart Meters.

Across the country, utilities are testing different aspects of Smart Grid, “Some utilities are focused on making sure their grid operates more efficiently,” says Katherine Hamilton, president of GridWise Alliance.“Others are focused on trying to get wind (power) online before focusing on how to deal with consumers. Some are employing Smart Meters. It’s a big system that involves everything from power plants to your washing machine.”

Consumer Savings in Pilot Programs
Pilot programs have yielded the following results, says GE (which is developing a suite of smart appliances to work with the Smart Grid):

*Baltimore, Md.: Reductions of 23-27 percent in usage with time of use pricing.
*Fayetteville, N.C.: A 20 percent reduction in usage with time of use pricing.
*Louisville, Ken.: Some consumers saved 20 percent using smart appliances.
*Pennsylvania: Bills reduced 75 percent with real-time pricing.
*Washington state: Electricity savings of 10 percent overall; 15 percent during peak periods.

Smart Meters and Backlash
Smart Meters allow utilities to read meters and track usage in increments as small as 15 minutes, making time-of-use pricing possible. Smart Meters are seen as a necessary component of any peak demand reduction program. Working with home energy management or tracking systems, consumers with Smart Meters can manage and reduce their energy use, supporters say.

But initial rollouts of Smart Meters in California and Texas met with strong consumer pushback. Consumers complained that their new Smart Meters resulted in utility bills double or triple from before. Lawsuits were filed in each state.

In both states, the timing of the rollouts was not ideal. In California, the new meters coincided with a utility rate increase and a hotter summer, both of which would have driven bills up anyway. In Texas, installation of the new meters coincided with extremely cold temperatures in December 2009. Customers also were billed for the cost of the Smart Meters. For example, in Texas each household is paying $2.21-$3.15 a month for about three years to offset the cost of Smart Meters, says Danny Bivens, director of market representation for the Texas Office of Public Utility Counsel. In California, the cost of the Smart Meters was folded into the base rate.

But further investigation in both states has determined that the Smart Meters technology and human error in deploying it were at least partly to blame for the higher bills.

In Texas (where several different utilities are involved) 1.1 million Smart Meters had been installed as of April 1, Bivens says. There, a software communication error caused about 3,500 households to be overbilled about $7 each in February. In March, human error during installation of Smart Meters resulted in 1,827 customers being overbilled by an average of $120, Bivens says. Customers were refunded the money.

In California, where 5 million Smart Meters deployed, 1,000 people have formally complained and many more have complained informally, says David Ashuckian, deputy director of the Division of Ratepayer Advocates, an independent division of the public utilities commission in California.

The utility, “PG&E has acknowledged that there have been a number of meters not functioning as they were expecting them to,” Ashuckian says. For example, the meters are supposed to show usage in 15-minute intervals so customers with time-of-use pricing could be billed correctly based on when they used electricity. But while the usage for the day was accounted for, some of the time periods were missing – a critical issue if time-of-use pricing were in place, Ashuckian says.

Another factor in both states: not enough education for consumers, despite money set aside for utilities to inform consumers about the new technology, Bivens and Ashuckian say. “This was a wakeup call,” Bivens says.

More Consumer Education on Smart Grid Needed
To ensure success, utilities should work harder to make sure consumers understand the technology, some advocates say. “This is rolling in awful fast,” says Charles Acquard, executive director the National Association of State Utility Advocates, an association of 44 advocacy groups in 40 states and the District of Columbia. “Everyone loved the concept. When it got to the practical realities, we didn’t think these things through. Do these fancy devices provide more benefit? We know they cost more. The utilities have just thrown these devices at consumers and said, ‘You’re on your own.’ Keep in mind, this is a major change for consumers’ behavior. Before that can happen, you need education. Smart Meters may be a good idea. But there certainly needs to a lot more work on it and take it slowly.”

Smart Grid-enabled products like this Honeywell Prestige thermostat will help homeowners manage their energy usage, but more consumer education is needed on Smart Grid benefits.
Smart Grid-enabled products like this Honeywell Prestige thermostat will help homeowners manage their energy usage, but more consumer education is needed on Smart Grid benefits.

For example, simply installing Smart Meters doesn’t equal consumer savings, Hamilton says. “A Smart Meter doesn’t do anything but track usage,” Hamilton says. “People expect they’re going to start saving money. Unless you have a home energy network, some device in your home that can help you figure out how to manage your energy better, the meter isn’t going to do it for you.”

Utility leaders are listening. In Texas and California, consumers can now log into a website and track their home energy use, Bivens says.

As more Smart Meters are deployed, retail electric providers have the incentive to offer more products to help consumers manage energy, Bivens says. “There are real benefits to be gained,” he says. “As the consumer advocate, we see a real upside as things develop.”

That development has been slowed to work the bugs out. For example, the timeline for time-of-use pricing has been slowed in California already based on recent events, Ashuckian says. PG&E has requested a three-month delay to implement time-of-use billing for small customers, but the Division of Ratepayer Advocates has requested a one-year delay, he says. Residential customers can opt in to the time-of-use billing program, but won’t be required to sign up until 2020, he says. In the meantime, customers will be able to see what their bills would be under two different time-of-using pricing plans, Ashuckian says.

Some consumers fear a Smart Grid will make it easier for utility companies to shut off power to homes who haven't paid their bill.
Some consumers fear a Smart Grid will make it easier for utility companies to shut off power to homes who haven’t paid their bill.

Pay Up or Else
Another concern is that Smart Meters, since they can be operated remotely, will make it easier for utilities to disconnect power for non-payment. Now, utilities have to send employees to a site to disconnect power and they often don’t have enough employees to disconnect everyone who is behind on a bill.  “For example, in PG&E’s territory, they have only enough personnel to disconnect 25-30 percent of customers who are eligible to be disconnected based on payment history,” Ashuckian says. “With (Smart Meters) they can turn everyone off (who is eligible to be disconnected).”

Finally, designer electricity [link to Designer Electricity section in Smart Grid in Your Home] means that someone is tracking how often and when you use your microwave, your washing machine, your dryer, your home theater system – every electric appliance or device in your home. Who will get to see that data?

“Our searches on the Internet are used to tailor the ads we see and to market to us,” says Jules Polonetsky, co-chair and director of The Future of Privacy Forum. “Here you’ll have this rich new data source. Most smart meters are going to send data back every 15 minutes. I know which room you’re in because the lights were just switched on. I know how often you use your microwave. I know you haven’t done your wash in three weeks, then you did a load of heavy towels. Who is going to be in charge of that data? Who owns that data?”

Privacy issues weren’t addressed for the Internet as it was being developed. “Now we’re trying to kluge that on,” Polonetsky says. “It wasn’t part of the initial design. Let’s learn from the mistakes of the Internet. (For Smart Grid) we need to think now about what the end game is. It’s harder if later on, you try to add privacy rules after you’ve already spent billions of dollars and built the infrastructure. There’s a real need to ensure all the actors cooperate to put the consumer in charge as opposed to business interests.”

Polonetsky advocates an open, transparent privacy policy stated in plain language – no jargon. Companies should be open about what data they’re tracking, what’s in it for the company and what’s in it for the consumer, he says. That data should not be saved indefinitely. “If you create intimate data about people and keep it forever, you risk it getting lost or misused,” he says. “Don’t create this treasure trove of data that is attractive to hackers. We have to make sure the consumer is in charge of the new grid and it’s smart for them – not just smart for the businesses.”

Any new system can be expected to have problems. Many of the active players in Smart Grid hope that lessons learned from the rolling out of the Internet can lessen any negative impacts of this new technology. They hope that consumers and the country will benefit from the green aspects of Smart Grid and the potential for saving money with Smart Grid in the home.

Credit: Renovate Your World