Power Savings of Smart Meters Prove Slow to Materialize

Source: By MATTHEW L. WALD, New York Times • Posted: Monday, December 8, 2014

Courtney Lupinek, a Baltimore Gas and Electric employee, replaces an old-style electric meter with a new “smart meter” in Owings Mills, Md. CreditNate Pesce for The New York Times 
The end is in sight for the meter reader, who each month faithfully tramps through the flower beds or into the basement, flashlight and clipboard in hand, to record electricity use.

They are being phased out because tens of millions of new meters talk directly to the electric company. The meters can record use by the hour, changing the price as the market changes and telling the customer — or maybe even the appliances themselves — the best time to buy energy.

But this is not happening. Although the goal is to shift consumption to off-peak hours when cheaper, cleaner electricity is available, experts say it is still many years away, despite billions in federal subsidies that have helped finance the switch to the so-called smart grid.

Analysts say that most customers, and public service commissions, are simply not ready for the change to what is known as dynamic pricing, which is intended to benefit the whole system by reducing demand during peak hours.

The idea is that as prices rise on summer afternoons or fall in the middle of the night, customers will learn to tailor their consumption — like running a dishwasher or washing machine, or charging an electric car — during times of better pricing.

Modern power meters are meant to smooth out peaks in demand over the day. But this has largely not happened.CreditNate Pesce for The New York Times 

It is a strategy that will become increasingly important as more wind turbines and solar panels are connected, and produce electricity without any relationship to the level of demand.

So far, though, industry and government officials, along with a few environmentalists, are pointing to a variety of other, smaller benefits from a number of smart grid innovations around the country.

For example, the new meters allow electric companies to remotely transfer an account from one name to another when a family moves, or cut off service for nonpayment, all from a central office, just as the phone companies do. And they can tell a utility that the electricity is out even when there is no one home to report that.

But the dishwashers, air-conditioners, water heaters and other electric appliances that would automatically take signals from the meter are still to come, leaving consumers to manually manage their energy consumption.

“The smart meter giving people real-time access to price information is not going to make them get up in the middle of the night and turn their dishwasher on,” said John P. Hughes, the vice president for technical affairs at the Electricity Consumers Resource Council, a consumer group that represents mostly large industrial users. “Getting the enabling technology to do that is going to take a long time.”

There are exceptions, of course. Illinois has about 25,000 households on the program, less than 1 percent of those eligible, and some of them save 20 percent on their bills, said Anne Evens, chief executive of Elevate Energy, which administers the real-time pricing program for Commonwealth Edison and Ameren-Illinois. Her company will send texts when prices rise above certain levels. It gives some customers a digital meter that it calls a Joule that displays the price down to the tenth of a cent. In an experiment, it controls when some electric cars recharge.

“You try to do the right thing for the environment and our pocketbook, keeping both in mind,” she said. The generators required on peak are more expensive than average, and dirtier too, experts say.

Joe Godinsky, in Sycamore, Ill., looked at the real time rates and realized that late-night electric prices were so low that he could turn down his gas heating system and warm up the bedrooms with electric heaters. He says he is convinced he is saving money and persuaded his parents to put their house on a real-time rate, too. But it’s not for everybody, he acknowledged. “I’m an engineer,” he said. “I like getting kind of geeky with things.”

Ms. Evens said that for the pricing to work and knock down peak demand, about 10 percent of customers would have to use it.

Nationally, though only about a million residential customers, less than 1 percent of the total, are now using real-time prices, according to Brett Feldman, a senior research analyst at Navigant Consulting. In 10 years, he predicts, it will be only about 14 million.

His company predicted early this year that by 2020, 82 percent of American consumers would still be unable to sign up for dynamic pricing.

The Energy Department estimates that by the end of next year, 65 million meters, covering more than a third of electricity customers in all categories, will have smart meters.

The Recovery Act of 2009 earmarked $2.5 billion for the smart grid, of which the new meters are a large part. Some of the money went for a variety of other devices, some of which are supposed to make the high-voltage grid backbone more stable.

So far, Congress has not paid much attention to the effect of the spending.

There are some environmental benefits, in addition to the cost savings.

A report by the Energy Department in August said that with new equipment, utilities could control distribution more tightly; in some cases, this allowed them to run the lines at slightly lower voltage, saving energy. The report also identified faster restoration of power in blackouts.

And they can save diesel fuel. In Texas, Oncor, which serves 3.2 million customers, says its trucks now drive 39 percent fewer miles, a drop of about 14 million miles, because it has installed smart meters.

And there is the reduction in the jobs themselves, Although the meters were paid for in part by the Recovery Act, which was supposed to stimulate employment, the effect of the meters has been exactly the opposite.

“It eliminated literally thousands of meter readers across the country, and no way has it created any type of permanent work,” said Michael Langford, president of the Utility Workers Union of America.

“The meter-reading jobs were decent, good-paying jobs,” he said. “People were able to buy homes, pay their taxes, buy cars on them, and we eliminated those.”

But for consumers, the payoff has for the most part not been realized. In the Maryland Office of People’s Counsel, which represents customers in public service commission hearings, William F. Fields, a senior assistant, said that the cost-effectiveness of smart meters had yet to be demonstrated.

“I’ve never seen an analysis that shows that shifting my dishwashing, clothes-washing and clothes-drying load is going to make a significant impact on my monthly bill,” he said. “It’s just not that much electricity