SMART ELECTRIC METERS: IS THERE ANY CONSUMER BENEFIT?

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curmudgeonWithin the developing utility Smart Grid universe, this time we’ll look at some special concerns about the customer-centric Advanced Metering Initiative area.  Here the deck is stacked entirely against the consumer.  First, the consumer will have to pay the costs for implementing the Initiative; in California alone, the costs just for replacing a significant portion of all of the state’s existing customer power meters will be in the billions of dollars (“Yep, son, that’s billion with a ‘B’ ”).  Electronic meters are inherently more expensive to purchase than the (still fully functional!) mechanical meters that they replace, and the mass replacement program also has huge up-front labor costs.  These costs will be (eventually) paid in full by the ratepayers.

After paying for the mandatory investment the consumer will then be hit with “Time of Use” power pricing, and the general expectation is that the overall cost of electricity will rise, even at a constant consumption level.  For example, the Curmudgeon saw a presentation by one southeastern utility, which had a nominal off-peak power cost of about 8 cents per kwh, in which presentation they proposed a “critical peak load” hourly pricing figure of 50 cents per kilowatt-hour!  While consumers and businesses can shift some of their loads to off-peak hours, much cannot be shifted.  Utility bills will increase.

One of the virtues of AMI is touted to be “providing the customer with his previous-day’s consumption and billing information,” and doing so every day.  This is done as an inducement to get him to conserve, especially at critical peak load hours.  But is the huge investment in new technology needed to potentiate this “feature” really cost justified?   Right now the consumer can change out appliances and lighting in his home or business for more efficient units without any utility intrusion, and sometimes with the aid of utility “energy-efficiency improvement program” cash rebates!  Currently the consumer has (and has always had) all the “technology” he needs to push his home (or business) thermostat up a bit on summer afternoons and down a bit on winter nights.  Those who willingly want to conserve will do so already; those who have no use for conservation will further enrich the utility companies.  But everyone will pay more.

Turning to AMI telecommunications matters, utilities have no precedent or demonstrated skill at successfully building and operating telecommunications networks comprised of vast numbers of nodes, which networks are required to provide high-accuracy and -reliability daily transport of meter-derived power consumption data.  A metropolitan utility can easily have several million customer meters installed, and each one will be an untended individual communications node/”cash register” for the company!

All of the millions of meters, located in every imaginable physical setting and environment, have to function and to communicate properly every single day if the projected AMI efficiency benefits are to be achieved!  According to the AMI concept, each of the millions of meters is to be interrogated at least once a day (though there are fail-safe provisions for after-the-fact meter data collection as well).  No agency, except perhaps for a few large cellular telephone companies, has experience in running two-way wireless telecommunications networks with this number of nodes and this extent of geographical dispersion!

Smart Grid Electric Meter

Smart Grid Electric Meter

It is a very safe bet that senior utility managers and executives have no grasp of the difficulties inherent in keeping their newly-established meter reading networks reliably operational over long time frames, including EMI and RFI problems, “missing data” retrieval, error correction of retrieved data, huge daily instantaneous data flows into central billing computers, unscheduled meter maintenance/replacement, etc.  Past electric utility efforts at moving into the provision of public telecommunications services have rarely succeeded. This is another major potential failure point!

Then there is the matter of the use or misuse of personal consumer data collected by the utilities.  Using the new AMI systems, utilities will be collecting “load profiles” of each customer, i.e., detailed information about their individual power consumption patterns.  Such information is commercially valuable, both to the utilities themselves and to third-party businesses.  Access to these records would provide to a sales organization an advantage in marketing and selling power-related products and services to individual consumers.  What protections have utilities taken to ensure complete privacy of their customers’ data, which were gathered without specific customer authorizations?  Do the customers own and control their individual load profiles?  Do they have established privacy rights?  This could be a huge area of uncertainty.

Installation of the Smart Meter will in many cases automatically establish a “Home Area Network,” an RF-based network within each customer’s premise, with two rather unfortunate potential consequences.  First, the proliferation of these little meter-based RF-emitters across the entire metropolitan landscape will inherently raise the RF noise floor on the unlicensed radio bands on which they operate, thus affecting the operation of other customer-owned personal wireless networks.  Utility management, of course, won’t care; they “use” the spectrum freely but its maintenance is not their responsibility!  Second, the existence of a utility-controlled wireless network within a customer’s premise, specifically designed to control customer-owned hardware and to override (if necessary) customer decisions, provides the utility with some rather “Big Brother-ish” capabilities!  Is this something that consumers want, or even understand?

Lastly, the advent of (unrelated) new technology and shifting customer energy usage patterns needs to be considered.  Just two of the many current technology trends cast considerable uncertainty into the future structure of the industry: the (expected) increasing number of adoptions of both all-electric (battery) powered automobiles and of photo-voltaic “off the grid” local power generation systems.  The former, if large adoption numbers develop, threatens to overwhelm the existing distribution grids and to shift peak grid loads to very unusual hours, while the latter will slowly reduce overall load demand over time.  But is the Smart Grid actually being designed for use in a future utility world that may be considerably different from today’s industry?

Again, the Curmudgeon affirms that the issue is not at all whether the Smart Grid concept is worthy of being implemented.  In his opinion, it is.  From a technological viewpoint it is necessary, it will promote future energy efficiencies and, in the long term, it could perhaps foster a measure of national energy independence.  Rather the issue is whether the present utility industry structure (both municipal and investor-owned companies) and especially its management can do the implementation on a technologically sound and a fiscally conservative basis.  The present utility world is a commodity-based industry (“potatoes: 5 pounds for $1.99″), not a technological one, and these people are not “rocket scientists.”

This series has provided, admittedly, only a high-level “snapshot” of the utility world as it presently exists.  “Terms and conditions” in the industry will indeed change in the future, perhaps some of the problems described above will be satisfactorily solved, and newer and better technology may arise.  But the major decisions need to be made now, and those decisions have huge consequences!

“Doing this deal” is a fractional $(trillion) proposition, and the out-of-pocket costs accruing for the rate payers from bad choices and failures by the utilities can be potentially tremendous.  So it’s a crap shoot!   How do we ratepayers maximize our chances for success?  We wish we knew!

What do you think?

“Let’s keep the universe safe for RF”

The Old RF Curmudgeon

LBA provides RF engineering services, integration resources, compliance services and test equipment to support Smart Grid deployment.

4 Comments on "SMART ELECTRIC METERS: IS THERE ANY CONSUMER BENEFIT?"

  1. SilentLamb June 22, 2010 at 8:33 am · Reply

    I have a pet theory about all of this. After having a dear friend who’s electric bill tripled on installation of a smart meter, I started doing some investigation. At least in Texas, where she lives, they use 16 bit encryption. I don’t have to *you* what an absolute joke that is. Based on some other experiences that I have had, I have a working theory on it.

    In the beginning law enforcement used high electric and water bills to track marajuana grow houses. Since having huge bills became “an instant bust”, the growers got sneakier and started tapping into water mains and the electric grids directly, bypassing the meters and thus a free ride to jail. Then law enforement starting using spikes in power usage to locate them.

    I think that the high electric bills that some people are seeing with smart meters reflect a “hack” of the lackadasial encryption. Rather than a huge spike, how about a neighborhood wide uptick in usage? If you have what should be a $5000 bill but you spread it out so that it’s $50 per meter, it becomes a whole lot less noticeable.

    We’re already having issue with organized crime involved in hacking, corporate blackmail, and identity theft. I fail to see how this is a stretch. You have people have that have sufficient captial, skill, and motivation to carry this out. And it is the next logical step in the “arms race” between the grow houses and law enforcement.

    Just remember that when the first one gets busted and I get proved right *again*… you heard it here first.

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  2. Bill Sepmeier July 18, 2010 at 2:35 pm · Reply

    I’ve had a grid-tied solar with battery backup home/office power system for years. In the old days, I had a typical $40 meter with a Turtle remote reading device. too bad – the turtle had no idea, when the hall sensor tripped with every revolution, if the meter was buying or selling power. I spent 4 years or more reading my own meter and calling it in every month. Now I have a “smart meter.” It came with a 150 page manual – no kindding – and can do a lot of stuff, if you’re the co-op; it tells me no more than the old one did.

    It probably cost the co-op $1000.

    I don’t have to read my meter anymore.

    The “Smart Grid?” I call it a “design by a committee of well-heeled, mutually exclusive, special interests.” If the Internet had been designed like this we’d still be at 1200 baud dial up using CompuServe and AOL. “Smart Grid” is just another money trough for the usual digital suspects to feed in.

    (I called DAB a “science project out looking for a fiar,” back in the 90′s, too. I think it still is!) :-)

    The real smart grid are the investors in rapid start 8MMW gas reciprocating generators, which are being added everywhere there’s a wind turbine going in. Tri State Generation, service Denver, has over 150MMW of “instant-on” peaking power now, to compensate for wind intermittence, and is adding more. all imported, too, from Warcilla in .. Finland? Denmark? Not here :-)

    Boulder, literally next door to the TSG Plains End generating plant, is Xcel’s poster child “smart grid city” … you’re not hearing a lot about that investment in load-side management.

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  3. mbss August 2, 2010 at 3:26 pm · Reply

    Smart grid is a euphemism for electric monopoly and greed. There are plenty of ways to leverage resources, technology, and even independent finance to create small power grids all over the world to provide relevant and inexpensive energy to all who need it.

    As for me, I’d like to see as many states and nations as possible “off the grid” and off the trade of electricity shares once again. That would likely be the smartest move and offer the best cost alternatives to consumers–provided that the development and sales of reliable, cost-effective in-home and in-business power systems become ubiquitous and that individuals have the full right to keep or to sell their production to anyone they choose.

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  4. Patrick August 14, 2010 at 1:38 am · Reply

    I expect the future to be much different from the present. Soon, I expect to hear the sound of generators chugging away in my piece of suburban paradise when the smart meter tells us that a KWH is above…umm…say 50 cents. Not exactly a “green” solution.

    What next? A water well for every home?

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