Connecticut Light & Power (CL&P) will soon begin a pilot project involving about 2000 of its customers in the state. These consumers will have the ability to monitor and manage their daily electric consumption over the Internet.
The project will be unveiled in the Hartford and Norwalk areas later this summer and then will become available to an additional 2000 more residential customers in Hartford and Stamford. The new smart meters will be provided free to customers who opt in to the program and will allow for hourly usage monitoring according to variable billing rates that change depending upon the time of day. “We see great promise in this technology. It will help our customers gain some sense of control over their energy costs,” said CL%P spokesman Mitch Gross. “That’s the bottom line. People feel they have no control right now.”
CL&P’s basic motivation for introducing smart meters is the ability to introduce the variable pricing schemes. The utility hopes to encourage more customers to use power at night, when rates are lower, in order to smooth out demand for energy. By doing so, CL&P will become a much more cost-effective operation.
Not all groups are supportive of the pilot project. State advocates have pointed out that the smart meters aren’t really free – customers will eventually pay for the devices through raised billing rates. Advocates are also concerned over how fair it is to charge different rates at different times of the day.
CL&P already has an automated meter-reading system in place that provides readings once a month and charging a flat rate for the power used. Customers will still have the option to stay on the flat rate system if they wish. Opting in to the new variable pricing program using smart meters is purely voluntary.
Manufacturers and other large consumers of electricity are required by the state to pay variable rates for power. Other utilities in the state have been offering time-of-day rates to all of their customers for a long time. United Illuminating, power provider to the Bridgeport and New Haven areas, has provided these variable rates since the 1960s.
According to Gross, CL&P is comparing smart meters from several different manufacturers before settling on a particular model for the pilot project. One feature the meter must have is the frequent monitoring. Since a model hasn’t be decided on, the precise cost of the project has not been determined. CL&P did provide an estimate of $1,000 per meter in its application to the Connecticut Department of Public Utility Control to implement the program. Installation costs are included in the estimate.
Connecticut passed a law in June of last year that requires the power provider to offer new billing options for its customers, including time of day and real time rates. CL&P is also expected to report the results of the pilot effort back to state regulators some time in 2009.
By allowing electrical rates to fluctuate throughout the day according to the rise and fall of supply and demand would give consumers the incentive to use energy when rates are lower and conserve energy when rates are higher. By doing so, utilities can “smooth out” demand, effectively reducing costs.
Reducing demand on the highest power-consuming days of the year – the hottest days of summer, for example – is critical for cutting costs both for the utility and the customer. During these times, utilities must purchase energy from auxiliary sources, at very expensive rates, in order to meet demand.
CL&P’s original smart meter proposal was to provide them for 1.2 million customers by the end of 2010 at a cost between $250 million and $300 million. This strategy has been drastically scaled back after consumer advocate groups raised questions over the cost and necessity of such a huge effort.
United Illuminating currently has about 35,000 residential customers that choose the time of day rates. United Illuminating has not installed new smart meters but instead has upgraded its power grid and customers have the ability to track their energy usage over the Internet.
“We’re just taking a different approach,” said UI spokesman Ed Crowder. “We’re just going to do more with what we already have.”
So far, both the state attorney general and the consumer counsel’s office have expressed support for CL&P’s pilot project involving 4000 smart meters. However, so far they have been very cautious when taking steps forward in the effort. “We questioned the technology and the cost,” said Richard Sobolewski, supervisor of technical analysis for consumer counsel. “We’re waiting to see what the results are.”
Attorney General Richard Blumenthal believes that the pilot program is worth the effort but is concerned that time of day rates may affect homebound consumers. “Their rates may actually be raised, and they may be penalized if they’re unable to adjust their consumption patterns,” said Blumenthal. “We need to assure that there are no adverse, unintended consequences for the homebound.”
Blumenthal also said that CL&P must remain vigilant on the reliability and accuracy of the new smart meters. CL&P’s handling of consumer concerns over the accuracy of currently installed meters was found to be substandard following a recent six-month investigation.