Maureen Pekosh: Smart Meters Sounded Good, But Consumers Still Pay
Posted: Wednesday, December 7, 2016 3:02 pm
President Obama was lauded for his steps to reduce greenhouse gases and at least slow, if not reverse, the effects of climate change. One of his proposals allocated $3.4 billion in 2009 stimulus funds to revolutionize the electricity industry. But his idea was a bigger win than this. It would promote using renewable sources of energy, shorten blackouts, and save consumers cash.
What amazing device could be responsible for all these benefits? The smart meter. Sadly, once again the commonality between politics and reality is pitifully small.
A recent joint study by Northwestern’s Kellogg School and University of Chicago’s Booth School found that smart meters most likely will not lower customer bills or greenhouse gases. Glenview residents seem to agree, complaining about their increasing gas bills.
The logic behind smart meters seems sound initially. Consumers armed with information about when electric usage is most costly will voluntarily shift usage from peak times to less expensive alternatives. Spreading out electricity usage will allow utilities to make it easier for suppliers to utilize base load rather than peak load power plants. Studying electric usage in Ireland with fixed and time of use pricing, the study showed that varying pricing can affect peak load electricity, but does not impact overall electric consumption. Sadly, the lower demand on peak load electricity did not translate into lower consumer prices. The study even inferred that smart meters could contribute to increased greenhouse gases since typically greener options fuel peak load plants while coal produces most base load electricity.
Again the public has been unnecessarily fooled out of more of our hard earned money. Exelon CEO John Rowe was quoted as saying, “It costs too much, and we’re not sure what good it will do. We have looked at most of the elements of smart grid for 20 years and we have never been able to come up with estimates that make it pay.” Until Obama provided the incentive with his stimulus funds, the smart meter was not economically feasible. Illinois Attorney General Lisa Madigan added, “The utilities have shown no evidence of billions of dollars in benefits to consumers from these new meters, but they have shown they know how to profit.” We consumers are paying for the new infrastructure through higher rates. ComEd requested a rate increase to fund improvements to update its technology (i.e. Smart Grid) and an additional increased charge for delivery.
Illinois doesn’t have the money to pay many of its ongoing bills yet it can spend billions of dollars updating the electricity network and installing smart meters in private homes. Illinois’ governor at the time, Pat Quinn, did veto the bill to fund smart meter installations. But the Illinois Senate overrode his veto. At the time the bill was being debated, ComEd anticipated rates increasing $.40 in 2016 and $.80 in 2017. They must have no real financial forecasting skills since their requested 2017 rate increase is 250% higher than they initially estimated. Do they believe that consumers also can’t perform the math and will go along with these rate increases which provide no real value?
Reinventing energy is not about a smart grid. It is really a two-pronged approach to changing how we create energy and how we use energy. Suppliers need to be encouraged to modernize electricity sources rather than invest in smart grids. Greenhouse gas producing coal plants should not be the base load. Alternative energy sources like solar and wind should be how our stimulus funds are spent. Then we really would be investing in our future. Alternate suppliers of renewable energy should be encouraged to enter the market and make energy more competitive for consumers. ComEd needs an incentive to provide reasonably priced renewable power not more profits.
We consumers do not just need to wash our clothes late at night. We need to make more conservative choices. We need to turn off lights. We do not need to leave devices on when not in use. We do not need to keep devices plugged in when idle. We do not need to keep public spaces freezing cold in the heat of summer. Utilities are interested in cutting their costs not ours. It is up to consumers to be less wasteful.
Smart meters may have potential to help consumers make smarter energy choices. The utilities empower consumers to choose timing of power usage when sharing cost and usage data on a real time (hourly) basis. The concerns of too many new smart meter owners that their bills have skyrocketed after the meter was installed are generally being discounted by utilities. They offer standard excuses like the temperature changing or more power being used. When smart meters were installed, there were no consumer protections added to motivate utilities to ensure the meters were in fact working properly. The assumption is that meters are tested when manufactured and that is ample consumer protection. But what can we expect from a state that cannot pass a budget but can pass a bill allowing ComEd a rate hike to keep its two nuclear power plants open. In this proposal, ComEd petitioned to be allowed to charge consumers for power used during peak hours rather than overall consumption. So much for ComEd spurring the public to help conserve energy. Luckily, that provision was removed from the final bill. Legislators were concerned about job losses, union backlash, and lost property taxes if the power plants closed. Sadly, few seemed concerned about consumers’ already stretched cash reserves. It seems like our best option might be to buy stock in ComEd. We keep financing their profits. Owning their stock seems the only way we can share in their wealth.