IEE Executive Director Lisa Wood says, “Although specific results will vary by utility, our study found that even with conservative assumptions regarding consumer engagement in technology, programs, and rate plans, utilities and their customers can expect positive net benefits from their AMI investment over the next 20 years.”
The analysis concluded that focusing on accelerating electric vehicle (EV) adoption is the best strategy to achieve the greatest consumer-driven benefit. “The benefits of EVs created a disproportionately high share of the overall consumer-driven savings, indicating that even modest increases in EV adoption will have a large impact on benefits.”
In the white paper, the IEE compares AMI benefits and costs, identifying four kinds of utilities defined by real-world factors that influence the overall business case for smart meters, including current generation mix, renewable energy portfolio, regulatory environment, energy prices, and emphasis on efficiency and conservation.
Regarding utility customers, the study factored in both how likely they were to be engaged in a utility’s energy programs, and how actively they would manage their energy use. For example, in a service area of one million households, the total cost for a utility to invest in AMI and associated home energy management technologies will vary from a low of $198 million to a high of $272 million.
According to the IEE, the AMI investment “will produce operational savings (resulting from avoided metering costs, automated outage detection, and remote connections) of between $77 million and $208 million, and customer-driven savings (resulting from energy pricing programs, in-home enabling technologies, and energy information) of between $100 million and $150 million. The net benefits from investing in AMI ranged from between $21 million and $64 million for the four types of utilities.”
Analyst Wood adds: “In estimating the net benefits of smart meters, we took a very conservative approach and assumed fairly low participation rates by customers in different program offerings even after 20 years. We believe that if customers can choose their preferred rate plans, programs, and enabling technologies, and if significant investment is made in consumer engagement, the benefits to customers, utilities, and society would be even greater. Households that have EVs created a disproportionately high share of the overall consumer-driven savings, indicating that even modest increases in EV adoption will have a large impact on benefits.”
The white paper is available for download at SmartMeters WhitePapers