Within 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!
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