The smart meter is emerging

The smart meter is emerging

Mechanical utility meters with their spinning dials will soon become a notion from the past, along with the meter reader and his monthly visits that provide estimates of your monthly consumption.

In the United States, the smart meter has already arrived in North Carolina and in Bakersfield, California as well as the Twin Peaks community in San Francisco.  Smart meters were introduced nationwide to Italy in 2005.  Within the next three years, smart meters are expected to arrive in the San Jose area – the famed “Silicon Valley.” This new generation of utility meters will be packed with technological breakthroughs enabling utilities to offer new services.  According to Pacific Gas & Electric (PG&E), these new services include the ability to turn on and off electricity remotely, instantaneous notification of power outages, and deployment of variable billing rates based on supply and demand of power.

PG&E and other companies involved with development of smart meter technology, such as Silicon Valley’s Echelon, have even bigger plans for the new technology such as the ability for the device to communicate with your home computer.  Thermostats equipped with smart technology will be able to manage smart-enabled appliances, notifying them the most efficient mode of operation based on the variable billing rates.

Don Von Dollen is a manager at the utility industry-funded Electric Power Research Institute, based in Palo Alto, California.  “Most customers would be surprised that a utility really doesn’t know if power is flowing to their home or not,” he said adding that smart meters will establish “the first time we’re going to have a communication link to each customer.”

PG&E received approval from California’s state regulatory board to expend some $1.7 billion in ratepayer dollars to install over 10 million smart gas and electricity meters by 2012.  The installations began in December of 2006 in the Bakersfield area and Sacramento, the state capital.  Through the first week of April, 2008 the utility had installed 435,000 of the devices and 115,000 are fully functional.

PG&E has also sought approval to spend an additional $625 million on the latest technology available in smart meters.  It is currently testing them in the Twin Peaks neighborhood of San Francisco to find out how well the wireless radio functions communicate in that famously hilly area.  PG&E also wants to test whether the extensive wiring there might cause interference.

Michael Peevey, head of the state regulatory commission, said, “Without these meters, we will limit the ability of people to truly change their consumption habits.  However, it doesn’t stop at the meters.  Once the customer is informed, we must ensure that there is sufficient incentive to get the customer to take action.”

Peevey’s statement outlines the primary motivation for getting smart meters installed: demand response.  Demand response describes the future ability for utility companies to smooth out energy demand spikes, such as those that occur during hot summer days when so many are turning on their air conditioners.

Von Dollen said the goal is to consume less power and to do it in a way that customers aren’t affected as dramatically such as when a blackout occurs.

PG&E says that smart meters will be read remotely every hour for residential customers and every 15 minutes for commercial customers.  Traditional meters where only read once a month by a human meter reader.  A portion of the 900 or so meter readers employed by PG&E will transfer to other positions within the company.  Some of the remaining employees will retire and others are a temporary workforce.

The system in Bakersfield will get its first significant test this summer.  Customers there had the opportunity to opt-in to a program called SmartRate where they pay much higher rates during times of peak demand and discounted rates during off peak hours.

Describing SmartRate, Andrew Tang of PG&E said, “We don’t believe in mandatory programs.  We think you can create the right behavior through economic incentives.”  Tang also pointed out that studies have shown that consumers use 10 percent less power when they have more information regarding their energy consumption.

San Jose-based Echelon worked with Italian utility Enel to roll out 27 million smart meters across the country.  Echelon has also seen its products introduced in areas as diverse as Austria, Australia, Russia, and North Carolina.

Duke Energy of North Carolina has initiated a project that includes the installation of 57,500 of Echelon’s smart meters.  These devices not only provide usage information, but also allow for remote disconnect, pre-pay, and variable energy rates.

Echelon, understandably, has a grand vision of the future.  The company also makes smart thermostats and other smart devices for the home and business.  Jeff Lund of Echelon  makes an example of “dumb refrigerators” and how it can’t know what time of the day is most efficient for defrosting when it requires more power.  “You don’t care when it defrosts.  You just care that your refrigerator isn’t frosty,” he said.

PG&E’s huge project has not been without bumps in the road.  There have been formal complaints that customers’ bills spiked after having the devices installed.  Paul Moreno says the complaints are few and reflect unusually high temperatures in Bakersfield and people moving into new homes where they hadn’t paid for utilities before.

Moreno adds, “This is not to say our deployment has been flawless, but the problems we have identified either had zero impact on customer bills, or were spotted before the bills went out or shortly afterward.”

Pacific Gas & Electric
One Market, Spear Tower
Suite 2400
San Francisco, CA 94105-1126

Echelon Corp.
550 Meridian Ave.
San Jose, CA 95126

Electric Power Research Institute
3420 Hillview Avenue
Palo Alto, California 94304

Viale Regina Margherita, 137
00198 Rome

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