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PG&E Delivers On Promise Of Smart Meters
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TenthG917
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TenthG917,
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4/22/2014 | 2:10:51 AM
Major US Utility Says "No Rational Basis" for Mandating Smart Meters

Major U.S. Utility Says "No Rational Basis" for Mandating Smart Meters


 

What is presented below is a summary of key points made by Northeast Utilities in its filing of January 17, 2014, with only slight editorial changes, for example, replacing the term "advanced metering infrastructure" with the term "smart meters."

Overall Perspective – No Rational Basis for Smart Meter Mandate

"There is no rational basis for ...mandated implementation of [smart meters]."

Mandating smart meters "comes without due considerationof key issues such as:
  • the immense cost attached to the technology choice;
  • whether customers are willing and able to pay the price of this technology choice;
  • whether the functionality provided by the technology choice will be utilized by customers or is even sought by customers;
  • whether the imposition of significant costs ... for this technology conflicts with other policies encouraging ... increased penetration of distributed resources [like wind and solar];
  • whether investment in distribution upgrades needed to accommodate distributed energy resources [would be] a better investment of customer dollars given the relatively small incremental benefit afforded by [smart meters]; and
  • whether other issues such as market alternatives, time-varying rates, and cyber-security should be resolved before there can be any rational determination that this technology is a good choice for customers."

Smart Meters Are Not a Good Choice for Consumers

"The [smart meter] technology choice is made although there is no evidence that this is a good choice for customers.  Conversely, there is ample evidence that this technology choice will be unduly costly for customers and that the objectives of grid modernization are achievable with technologies and strategies that rank substantially higher in terms of cost-effectiveness.  For customers who will pay the price of this system, there is no rational basis  for this technology choice."

"There is no evidence that customers are willing to pay for the limited incremental functionality gained through implementation of [smart meters].  In fact, there is evidence to the contrary.  For example, industry studies show that only 46 percent of customers are aware of the concept of 'smart metering,' and of that percentage, 33 percent associate smart metering with complaints of meter inaccuracy, higher customer bills, invasion of privacy and health concerns.  Many customers have a deep aversion to technology that links them to the 'grid' in a way that they perceive as an invasion of their privacy and/or detrimental to their health."

"[H]ome energy automation solutions like smart thermostats and appliances are advancing at a rapid pace and, in many cases, are leverage existing communications infrastructure such as broadband internet.  Rather than duplicating these expenditures and predetermining that the preferred communication should be enabled through the ill-considered implementation of [smart meters], the Companies should be afforded the flexibility to design [grid modification plans] that leverage the expenditures for the benefit, not to the detriment, of customers."

Smart Meter Costs Can Not Be Justified

"There is no cost justification that can support the implementation of [smart meters].  As identified by Northeast Utilities, ... [a smart meter] roll-out is problematic due to the extraordinary cost associated with, at best, a modest increase in functionality."

"Northeast Utilities estimates, conservatively, that the price tag for a [smart meter] rollout, including the recovery of existing investment on the Companies' books would likely approach, and possibly exceed, $1 billion over the course of ... implementation – all of which is to be borne by customers who may or may not be interested in interacting with the distribution system at the level implicated by [smart meter] technology."

Smart Meters Are Not an Appropriate Technology Platform for Grid Modernization

Mandating smart meters "creates an intractable obstacle to grid modernization.  The mandate precludes [utilities] from designing and implementing grid modernization plans that are best suited to customers and that mitigate the cost that customers will bear for progress."

"An Advanced Metering System is not a 'basic technology platform' for grid modernization and is not needed to realize 'all of the benefits of grid modernization.'"

"Meters do not reduce the number of outages; metering systems are not the only option for optimizing demand or reducing system and customer costs; and metering systems are not necessary to integrate distributed resources [such as wind or solar] or to improve workforce and asset management.  Therefore, it is not correct that advanced metering functionality is a 'basic technology platform' that must be in place before all of the benefits of grid modernization can be fully realized."

"Accordingly, not only is there a flaw in the ... premise that an advanced metering system is a 'basic technology platform' for grid modernization, but also the implementation of a costly, advanced metering system is at odds with policies designed to promote the growth of distributed energy resources."

"Immense, near-term investments in [smart meters] should not be mandated without (1) methodical, valid analysis of the associated costs and benefits; and (2) the development of a plan to solve the detrimental impact of cost-shifting driven by the pervasive installation of distributed energy resources."

 "It is also premature to assume that [smart meters] can provide for large-scale conservation voltage reduction ('CVR')."

Cyber-Security Issues Prevent Development of a Suitable Implementation Plan

"Without resolution of the [issues related to] cyber-security, it is not possible ... to develop a suitable [smart meter implementation plan].  [Smart meters] introduce a brand new portal into the Companies' information systems, significantly increasing the cyber-security risk.  Currently, the only mandatory standard for electric distribution company cyber-security is the North American Electric Reliability Corporation Critical Infrastructure Protection ('NERCCIP'), which applies only to bulk power systems and not to the electric distribution systems and metering infrastructure..."

Smart Meter Technology May Soon Be Rendered Obsolete

"Last, but not least, there is little confidence that the incremental benefits of moving to a [smart meter] platform will be sufficient to warrant the cost.  Given that the grid modernization technology sphere is a dynamic, rapidly evolving marketplace, it is also unclear whether the incremental benefits, if any, would begin accruing to customers prior to the implemented [smart meter technology] being rendered obsolete.  In any event, the cost remains unjustified by the benefits."


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