Sunday, November 28, 2010

Post # 51 - Radiation and Smart Meters: One More Battlefield

Update (12/2/10): The California Public Utilities Commission today, by a 4-1 vote, declined to go forward with the requested health inquiry discussed below, determining that the matter was outside the agency's area of technical expertise. The CPUC decided that it instead should defer on this issue to the Federal Communications Commission. (Technically, the CPUC voted to adopt the decision of an agency administrative law judge dismissing the request for an inquiry. The decision adopted by the CPUC can be read here.)

Although we don't usually think of them in such terms, smart meters are radio transmitters, sending radiofrequency microwave radiation (RF) signals from both electric and gas meters. As the public has become more aware of smart meter roll outs, there have been increasing public concerns over whether such RF signals constitute a public health risk. While industry groups such as the Utilities Telecom Council
point to studies indicating no significant health risks, smart meter opponents are not so sure. And concerns over RF emissions are becoming a new battleground in the smart meter wars.

For example, in Maine, opponents of Central Maine Power Company’s smart meter installation have asked the Maine Public Utilities Commission, which approved the $192 million program, to stop it and investigate potential health effects. And similar concerns are being raised in California.

California, of course, long has been ground zero in the smart meter wars, largely due to the consumer revolts that have dogged Pacific Electric & Gas’ smart meter installation. Concerns over radiation entered the mix this year, and the EMF Safety Network, a group concerned about electromagnetic radiation, filed a request with the California Public Utilities Commission asking for a health study of PG&E’s smart meters. PG&E, in response, asked one of the CPUC's administrative law judges to dismiss that request, and the judge tentatively agreed.

However, in written comments filed earlier this month, the CPUC’s Division of Rate Payer Advocatesa unit within the CPUC charged with seeking the lowest possible rate for service consistent with reliable and safe service levels – recommended that the CPUC investigate those health questions. In its comments, the DRA argues that the CPUC has a responsibility to ensure that PG&E's wireless meters do not endanger public health. The DRA does not itself take a position on the health issue one way or the other. However, the DRA argues that the fear of potential health effects has already helped undermine public confidence in the new meters and must be addressed: "Unless the public's concerns can be put to rest, there is a very great risk that PG&E's SmartMeter deployment will turn out to be a $2.2 billion mistake that ratepayers can ill afford."

I certainly do not have the expertise to weigh in on the health issue, although it's unclear to me that smart meters present any concerns not already present with our ubiquitous cell phones, iPads, blackberries, wireless notebooks, etc. But there is a broader issue here. Fears over smart meter radiation are just one more example of apparent industry failure to anticipate consumer concerns. A major obstacle to smart grid advancement – indeed, perhaps the most important obstacle – remains the absence of real consumer input at the front end. Consumer concerns would be best addressed, and consumer buy-in better achieved, if issues such as smart meter radiation were fully debated before smart meters roll outs actually begin.

Tuesday, November 23, 2010

Post No. 50 - Xcel's SmartGridCity: Still Not Over

As I suggested in my most recent post, Xcel's victory at the Colorado Public Utilities Commission is my no means final.

While a PUC administrative law judge ruled that Xcel should be allowed to recoup approximately $45 million in installation costs from retail ratepayer -- about three times the company's original estimate -- administrative appeals to the full commission have been filed Colorado's Office of Consumer Counsel and two other parties. I do not yet have the filings, but their appeals are summarized here.

So the saga of what has been a smart grid poster child -- on way or the other -- continues.

Saturday, November 13, 2010

Post # 49 - Xcel's SmartGridCity Wins Another Round

In another step forward for Xcel Energy's SmartGridCity project in Boulder Colorado, an administrative law judge for the Colorado Public Utilities Commission has ruled that Xcel may recoup nearly $45 million in costs from retail ratepayers -- an amount three time's higher than the company's original estimate. Next stop -- an appeal to the full PUC.

Xcel first announced that the company had chosen Boulder as the location to build its experimental smart grid in 2008. At the time, company officials estimated that the cost to the utility would be $15.3 million. However, the costs incurred by Xcel ballooned over time, causing the company to ask the PUC for permission to increase its rates to pay for the project. Last December, the PUC granted conditionally Xcel's request, but told the company that it must retroactively file for a Certificate of Public Convenience and Necessity, which gives the PUC more authority to regulate the project. The PUC ruled that if the certificate was not granted, Xcel would be forced to refund customers any money collected to pay for the smart grid.

Xcel filed its application last March, leading to contentious litigation before the PUC as to whether ratepayer benefits justified ratepayers bearing the costs. Last August, Xcel, the Governor's Energy Office and staffers at Public Utilities Commission proposed an agreement, recommending that the certificate be granted and that Xcel's cost recovery for SmartGridCity be capped at $44.5 million. It was this settlement agreement that the PUC judge has approved.

But the game is not over -- opponents can appeal the judge's decision to the full PUC. In particular, Colorado's Office of Consumer Counsel -- a state agency charged with representing the interests of residential, small business and agricultural consumers before the PUC -- has strongly opposed the settlement and is expected to appeal.

Tuesday, November 9, 2010

Post # 48 - Ontario Smart Meter Status Report

According to the latest smart meter monitoring report of the Ontario Energy Board (OEB), which regulates natural gas and electricity utilities in the province, Ontario is well on the way towards completing its smart meter rollout.

The OEB report states almost 4.3 million smart meters were installed as of August 31, 2010 – which (according to the report) amounts to 92 percent of the June 2011 target for smart meter installation in the province. About one-third of the installed meters (1.55 million) are enrolled with the meter data management repository, an independent central meter data repository that receives and process the hourly consumer consumption data transmitted daily by each of Ontario ‘s 93 local distribution companies. Moreover, almost 949,000 of the installed meters are on time-of-use (TOU) billing, whereby electricity prices will vary based on the electricity is used. Thus, the province’s distributors appear roughly on target to meet the government’s target of having 3.6 million Regulated Price Plan (RPP) customers billed on a TOU basis by June 2011 (under RPP, prices are adjusted by the OEB for past differences between what consumers have paid and the cost to supply them over a 12-month forecast of future electricity costs).

The report notes that forty-one distributors (representing 3.99 million customers) have June 2011 as mandatory dates. However, four of these distributors (representing 317,728 customers) have indicated they expect to make an application to the OEB to change their mandatory date, and Hydro One Networks has applied to the OEB for an exemption from its mandatory date that would exclude approximately 150,000 customers that are currently outside the reach of Hydro One’s smart meter telecommunications infrastructure.

One distributor – Milton Hydro – has completed TOU rollout for all of its eligible RPP customers. Another – Newmarket-Tay Power Distribution – has completed TOU rollout for all of its residential customers and is proceeding with its eligible RPP general service customers. At the same time, however, an additional 27 distributors (representing 497,203 customers) have reported being behind on one or more of the smart meter program milestones (e.g., scheduling, enrollment testing, unit testing, system integration testing). Of these, 19 distributors do not expect the delay to impact their ability to meet their mandatory TOU date, while the other eight have yet to make a determination.

Moreover, nine distributors (representing 424,237 customers), including the four with a June 2011 mandatory date, have indicated that they will be making an application to the OEB to extend their mandatory date. Eleven distributors (representing 266,860 customers) reported "smart meter entity" confirmed enrollment testing dates that are not consistent with their mandatory enrolment testing date, and 17 distributors (representing 362,880 customers) have not scheduled an enrollment testing date.

Sunday, November 7, 2010

Post # 47 - Smart Grids and Meters May Not Accomplish All that Utility Companies Expect

I have previously blogged about studies indicating that the consumer benefits of smart grid and smart meters may be oversold (for example, Post Nos. 27, 40, 41, and 46). Now, a new study from the British-based technology analyst Ovum casts doubt on the ability of smart grid and smart meters to fully live up to their potential from an industry perspective. While Ovum acknowledges that smart meter and smart grid investments are able to address many issues facing utilities companies, smart meters could increase costs. Ovum also found more investment in newer technologies is needed.

According to Ovum's report on its study, the utility industry faces major -- and possibly conflicting -- challenges. For example, utilities must respond to public concern over CO2 emissions. The cost of needed infrastructure investment is high, while rising fuel costs create pressure to reduce costs. At the same time, many utilities are experiencing an increase in payment defaults due to the economic downturn. Further, the workforce at many utilities is aging rapidly.

Ovum concludes that smart grid and meter investments will be very helpful in dealing with these problems. However, to fulfill the full promise of smart energy, utilities will require further new technologies such as analytics, billing and customer relationship management (CRM) systems. Further, customers may struggle to understand the benefit from smart meters and may be confused by the additional complexity smart meters bring. Ovum also finds that there is a very strong risk that this increase in complexity will cause an increase in customer service costs.

The study highlights two major and related smart grid goals: reducing the environmental impact of existing forms of electricity generation by supporting renewable energy and energy storage; and employing smart meters to influence customer behavior through demand-response programs. But the study cautions that these benefits, while significant, should not be overestimated. While they could make an impact, Ovum concludes that there is a possibility they will not deliver what utilities are expecting.