Anyone who has been associated with the software or technology business understands the concept of “vaporware” in which marketing geniuses promise a product that the engineers have yet to either build or perfect to GA “generally accepted” standards ready for release.
Don’t get me wrong. The smart meter works as designed collecting usage information and sending it wirelessly to the utility. But the benefit of that functionality accrues almost entirely to the utility in the form of lower costs and better operational efficiencies.
A recent presentation of research by Brattle Group along with the Edison Foundation’s Institute for energy Efficiency to NARUC’s winter meetings comes very close to blowing vaporware smoke in the eyes of state regulators.
Admittedly, the Commissioners are eager to hear good news about smart meter benefits for customers because they sure are not likely hearing that back home. But theCommissioners I know are used to having smoke blown their way and surely they see presentation for what it is.
Torture the smart meter data long enough to confess some customer benefit!
This presentation by Brattle, et al says that the net benefit to customers from smart meters “could” range from $96 to $287 million over a 20 year period for an investor owned utility with one million customers.
Brattle principal Ahmad Faruqui, made the presentation outlining the net benefits for four hypothetical utilities across four different regions (South, Central, East, and West). The study results suggest that most of the operational benefits that each example result from two-way communication between the smart meter and the utility. This is NOT news since we already knew that the biggest savings is reduced meter reading costs and information on energy use patterns for distribution.
But where the study results give me the “vapors” is when Faruqui begins to describe the “additional benefits would accrue as customers” by giving them opportunities to gain better information on energy use, participate in more utility-sponsored energy efficiency programs and that illusive future promise of household energy use information available in real time through future in-home devices and web portals. The reports also cites as “benefits” the customers’ ability to respond to dynamic pricing with “demand response” technology options such as programmable thermostats, direct load control like that on/off switch PG&E keeps asking to install on my A/C and electric vehicles with a time-varying rate.
Is that the best you can come up with?
Do you see what I mean?
They are making all these benefits up out of thin air—this is vaporware!
This is why attention is being paid to try to “educate PUC Commissioners” about the benefits of smart meters because in a growing number of states there are challenges to cost recovery for smart meter projects. You remember SmartGridCity in Boulder Colorado where Xcel has been fighting a rear-guard action to recover its costs or Baltimore there that state PUC dragged BG&E through the mud over smart meter costs and benefits. Similar challenges are being fielded in Connecticut and Illinois as the bills come due. It’s going to get uglier.
The plain truth is that—so far—there are few if any benefits to customers from smart meter deployment and the net benefits the Brattle report told the NARUC commissioners about of $96 to $287 million over 20 years is LESS than the annual increase in costs customers are likely to be charged by the actions of those same NARUC regulators allowing recovery in rates of the costs of smart meter deployment.
Don’t take my word for it. Read the report yourself and try not to laugh out loud!