|
'Smart' Electric Meters Debated over Cost
By Jay Gallagher - Press & Sun Bulletin, August 25, 2007
ALBANY - As early as next year, some electric customers in New York may be able to save money thanks to new "smart meters" by doing their laundry and dishes at night, and programming their air conditioners to raise the temperature in their homes if the power becomes too expensive.
Advocates see new meters as a tool that will help New Yorkers cut their utility bills, reduce the demand for power and help the environment.
But critics see a darker side to the idea. They fear that poor and uninformed consumers who don't have the option of changing the timing of their energy use will end up paying higher rates on top of a surcharge for a new electric meter they don't need.
The state Public Service Commission, which regulates utilities, is expected to rule as early as October whether an upstate utility can go forward with distributing the new meters, which are designed to provide more detailed information to both the utility and the customers about patterns of energy usage than current meters provide.
"Smart metering is absolutely necessary for home energy management in the 21st century," said Jim Laurito, head of Rochester Gas and Electric Corp.
He said that if the commission approves, his company and its sister utility, New York State Electric and Gas, could start installing the new meters early next year.
They would be the first utilities in the state to proceed with the idea, although all the others are working on it too.
But critics like Gerald Norlander of the the Public Utility Law Project, a consumer advocacy group, worry that while some people will save money, others will lose.
The advocates of the new meters "assume that elderly and ill electric customers in sweltering apartments can just shut off their cooling appliances and wait until temperatures cool and skyrocketing spot-market prices come down with the same ease that those who can afford cell phones avoid peak pricing hours," he said.
The dispute is the latest chapter in the long-running battle over energy deregulation in New York.
While taking government clamps off the telecommunications industry resulted in lower prices and better services, the experience with power as government's grip has relaxed over the past decade has been mixed. Generally, prices haven't dropped significantly, and in some cases they have risen, as competitive markets for power have failed to develop.
In part to help spur competition, the commission last year told the utilities they had to submit plans to use the smart meters.
The new devices have some obvious advantages over the current meters. They can be read electronically, so they would eliminate the meter readers who sometimes have to gain entry to a home. In addition, the smart meters would allow bills to be based on actual usage every month, rather than an estimate every other month, which is the current system.
But Laurito and other advocates see a far bigger payoff. Once the meters are installed, the utilities plan to ask the state for permission to start varying the price they charge for power depending on what they're paying for it, mimicking the wholesale market, where utilities buy power. Generally the most expensive time, the time of highest demand, is between 2 and 5 in the afternoon, especially on warm days. Mornings and evenings are cheaper.
If by charging a different price, the utilities can persuade people to smooth out their energy use, they will have to build fewer power plants, since the system has to be built to meet the peak demand, and that will mean lower prices, advocates say.
"Everyone will save," said Ashok Gupta of the Natural Resources Defense Council. He pointed out that wholesale prices for electricity are set by the highest priced producer. So the less energy needed at peak time, the lower the price.
He said the only downside is that customers have to pay for the new meters. But Laurito said that will amount to only about $3.65 a year for 20 years for RG&E and NYSEG's 1.2 million electric customers, or a total of about $87.6 million.
The meters will be the first step in letting consumers get more control of their energy bills, said Westchester County Legislator Michael Kaplowitz, D-Somers, a longtime advocate of the idea.
"This will allow real competition in the marketplace, and it will drive prices down," he said.
Kaplowitz envisions the day when he will be able to let his house program his air-conditioning system so that the maximum temperature reaches, say, 80 degrees while he's away if the price of power goes over a certain level.
"This would allow me to make rational decisions based on price," he said.
RG&E spokesman Robert Bergin said steps are needed to curb demand, because even as the region's population and economy have stagnated, energy use has continued to rise.
He said the average monthly usage for a home in the region last year was 680 kilowatts, compared with 580 a decade earlier - an increase of more than 17 percent.
"That's the trend," he said, as electric devices like computers, cell phones and big-screen TVs become more common.
Jason Babbie, who follows utility issues for the New York Public Interest Research Group, pronounced himself "cautiously optimistic" about the plan, with the biggest plus being that consumers would have more information on which to make informed choices.
"It really depends on how they set the rate structure," he said. "But if people can see that if they turn off their TVs and turn down their air conditioning they save money, this could help them."
Power in N.Y.
Here is where New York's electricity comes from, according to the citizens Campaign for the Environment:
Nuclear: 29 percent
Natural gas: 21 percent
Hydro: 19 percent
Coal: 18 percent
Oil: 12 percent
|
