[xtypo_dropcap]B[/xtypo_dropcap]altimore Gas and Electric (BGE) may lose $200 million in federal stimulus dollars awarded by the Department of Energy for a grid upgrade. Maryland’s utilities regulator, the Public Service Commission (PSC) may deny BGE authorization to proceed, saying the upgrade comes at too high a cost to consumers.
BGE has submitted a proposal to deploy smart meters at homes and businesses in its service area. If denied, BGE would lose a $200 million federal stimulus grant awarded by the Department of Energy for grid upgrade, job creation, and as a way to empower consumers to regulate energy use.
Utilities regulator Maryland Public Service Commission is concerned these digital meters may cost consumers more than the meter upgrade is worth. Smart energy meters can provide consumers with more detailed information about energy use, sometimes with real-time sensors measuring how much energy consumers are using throughout the day.
Smart meters have been touted as a way to help consumers regulate and cut back on personal energy use, but a study by the American Council for an Energy-Efficient Economy (ACEEE) found that smart meters alone aren’t enough to help consumers reduce energy consumption.
ACEEE’s review of 57 residential consumer feedback programs led them to conclude that smart meters “are neither necessary nor sufficient for providing households with the feedback that they need to achieve energy saving.”
ACEEE found what was most effective in helping consumers cut energy use was enhanced billing, daily/weekly feedback, and real-time feedback on energy use. Smart meters are not the key player in cutting energy use.
The Maryland Public Service Commission (PSC), concerned about the actual value of the meters to consumers, denied BGE’s proposal, saying the meters require customers to take a financial risk and adapt to a new energy rate plan for savings that “are largely indirect, highly contingent, and a long way off.”
In theory consumers would benefit from the reduced cost of their energy bill, but that savings would be offset by paying for the new smart meter over several years. BGE says customers would save nearly $100 annually on their bill, outweighing the cost.
Maryland PSC denied utility BGE’s proposal on June 22. On July 12 BGE submitted a revised proposal with a request for action before July 30. If the proposal is not given the green light by July 30 BGE will forfeit the federal funding.
But that may be worse for BGE than for its customers.
According to C.P. Shankar, CEO of American Grid, BGE may have more to gain from installing smart meters than do its customers. The benefit to consumers is supposed to be more information about energy use, making it easier to cut energy costs. But as ACEEE found, the smart meter is not essential to providing that information.
Providing customers with such information is the business of American Grid. The company uses existing infrastructure (customer’s broadband and cell phone text messaging) along with devices that monitor appliance energy use to provide customers with real-time, up to the minute energy use information by appliance, provided in dollars and cents. In field studies they have been able to help customers reduce energy use by at least 10 percent and at most 23 percent.
For BGE, installing smart meters in their service area could mean cutting their meter-reader workforce significantly, as the smart meters would be in direct communication with BGE computers. If customers were too late paying bills, BGE could shut off their power remotely, saving the cost of sending a technician to do the shutoff.
Smart meters do have widespread support and this appears to be a critical moment in their deployment. If customers embrace them, they may become a useful energy saving tool. But with current plans, it looks like customers will be bearing the costs rather then reaping the savings.
BGE has submitted a proposal to deploy smart meters at homes and businesses in its service area. If denied, BGE would lose a $200 million federal stimulus grant awarded by the Department of Energy for grid upgrade, job creation, and as a way to empower consumers to regulate energy use.
Utilities regulator Maryland Public Service Commission is concerned these digital meters may cost consumers more than the meter upgrade is worth. Smart energy meters can provide consumers with more detailed information about energy use, sometimes with real-time sensors measuring how much energy consumers are using throughout the day.
Smart meters have been touted as a way to help consumers regulate and cut back on personal energy use, but a study by the American Council for an Energy-Efficient Economy (ACEEE) found that smart meters alone aren’t enough to help consumers reduce energy consumption.
ACEEE’s review of 57 residential consumer feedback programs led them to conclude that smart meters “are neither necessary nor sufficient for providing households with the feedback that they need to achieve energy saving.”
ACEEE found what was most effective in helping consumers cut energy use was enhanced billing, daily/weekly feedback, and real-time feedback on energy use. Smart meters are not the key player in cutting energy use.
The Maryland Public Service Commission (PSC), concerned about the actual value of the meters to consumers, denied BGE’s proposal, saying the meters require customers to take a financial risk and adapt to a new energy rate plan for savings that “are largely indirect, highly contingent, and a long way off.”
In theory consumers would benefit from the reduced cost of their energy bill, but that savings would be offset by paying for the new smart meter over several years. BGE says customers would save nearly $100 annually on their bill, outweighing the cost.
Maryland PSC denied utility BGE’s proposal on June 22. On July 12 BGE submitted a revised proposal with a request for action before July 30. If the proposal is not given the green light by July 30 BGE will forfeit the federal funding.
But that may be worse for BGE than for its customers.
According to C.P. Shankar, CEO of American Grid, BGE may have more to gain from installing smart meters than do its customers. The benefit to consumers is supposed to be more information about energy use, making it easier to cut energy costs. But as ACEEE found, the smart meter is not essential to providing that information.
Providing customers with such information is the business of American Grid. The company uses existing infrastructure (customer’s broadband and cell phone text messaging) along with devices that monitor appliance energy use to provide customers with real-time, up to the minute energy use information by appliance, provided in dollars and cents. In field studies they have been able to help customers reduce energy use by at least 10 percent and at most 23 percent.
For BGE, installing smart meters in their service area could mean cutting their meter-reader workforce significantly, as the smart meters would be in direct communication with BGE computers. If customers were too late paying bills, BGE could shut off their power remotely, saving the cost of sending a technician to do the shutoff.
Smart meters do have widespread support and this appears to be a critical moment in their deployment. If customers embrace them, they may become a useful energy saving tool. But with current plans, it looks like customers will be bearing the costs rather then reaping the savings.
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