Smart Meter News: Utilities Controversy

On the home front, the buzzword is "smart" - as in smart meters or devices that wirelessly tell power companies how much electricity consumers are using and encourage them to control their energy use. Utilities in California, Texas and the Northeast are spending billions of dollars outfitting homes and businesses with these meters. The problem is, not everyone thinks smart meters are so smart.

For states and localities, smart meters mean smart grids, and smart grids mean utilities can use energy more efficiently, prevent costly - both politically and financially - outages and add more renewable energy sources like solar and wind. According to the U.S. Department of Energy, if the U.S. grid were just 5 percent more efficient, it would be equal to permanently eliminating the fuel and greenhouse gas emissions from 53 million cars. For state and local governments, smart meters are a means to an end.

For utility customers, however, smart meters are ripping them off, logging more kilowatt hours than they believe they're using. While utilities, such as Pacific Gas and Electric in California, dispute the charges, attributing the higher readings to summer heat and new rate hikes, some customers have seen their smart meters log between a 30 and 70 percent jump in electricity consumption in just one year.

Customers in California and Texas are up in arms, contending that not only are these devices inaccurate, but they're also expensive, between $250 to $500 each, which utilities are passing on to customers in the form of fees and higher rates. Furthermore, these expenses are just the tip of the iceberg. Consumers will be responsible down the road for the cost of installing home displays to control appliances and other equipment.

The California Public Utilities Commission is moving to bring in an outside auditor to determine whether the meters are accurate, and Connecticut's Attorney General Richard Blumenthal convinced its utility to scale back its plans to provide smart meters to all of its 1.2 million customers. Instead, the Connecticut Light & Power Co. is running a pilot program that will not only test whether smart meters are effective in changing consumers' habits, but also will test variable pricing as well.

But smart meters are here to stay whether consumers want them or not. The Recovery Act will help put smart meters in 40 million homes by 2015 - that's up from 8 million homes now - and Texas law already requires rapid smart-meter deployment. It seems like this whole fiasco offers a lesson about the importance of open communication between utilities and their customers. In that vein, the Electric Reliability Council of Texas was able to negotiate an agreement with Texas utilities in which they agreed to spend $20.6 million on consumer education and $17.5 million to purchase home display units for low-income families.

While California and Connecticut are addressing concerns about smart meters, the real battle for state and local governments lies in educating consumers about smart meters. These devices change everything about how citizens currently use and pay for energy. Consumers may have to take more responsibility for their energy use, and may even have to pay more. None of that will be acceptable unless citizens understand the long-term benefits: a more affordable, efficient grid that also offers considerable societal benefits - such as less impact on the environment.