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Eugene Weekly : News : 9.15.11

‘Smart’ Meters

Will EWEB’s radios be worth the cost?

by Alan Pittman

While many Eugene residents are struggle to pay their electric bills in the midst of the deepest recession in decades, EWEB may increase utility bills by $30 million or more to pay for controversial new “smart” meters.

“It’s probably between a $27 million and $33 million investment,” EWEB General Manager Roger Gray told the Eugene City Council this week about his proposal for replacing mechanical meters with digital meters that will radio power use to EWEB headquarters. 

Councilor George Poling said his “biggest concern” was the ratepayer cost. “There’s already people that are having trouble paying your electric bills right now.”

Gray said the meters won’t reduce existing rates, but instead through greater utility efficiency, “it will keep us from raising rates faster than they otherwise would go up.”

 Other utilities have spent $500 or more per meter to install radio meter systems. With about 86,000 EWEB electric customers, that could cost $43 million. Other utilities have passed that cost directly to families in higher rates.

That cost could be much higher if the utility continually upgrades the meters with advances in technology. Gray said he expects to replace the meters on a schedule similar to upgrading computers, every four to five years.

Gray said EWEB may reduce the “immediate, very high impact” on ratepayers by spreading the cost out over more years by borrowing and/or by using reserves. But the interest cost of borrowing and the cost of not using reserves to reduce existing rates could also be passed on to ratepayers.

The efficiency and conservation savings from the radio meters is also unclear. Gray said a cost benefit analysis by EWEB is “still under construction.” He said, “it is not a slam dunk, we really have to sharpen our pencils very carefully.”

Gray said ratepayers will be able to reduce their electricity costs and conserve power by using constant feedback from the meters to use less power overall and less power at high-cost peak times. “They’d have a much more powerful incentive to conserve energy.”

But independent studies last year showed such conservation and rate savings may be elusive. A University of Oxford study found the meters didn’t significantly reduce power consumption. A Dutch study found an initial reduction in energy use with radio meters followed by a resumption of past usage within a year, Reuters reported.

The biggest benefit from radio meter energy conservation also will depend on consumers paying more for new devices. Gray said charging new electric cars at night will be a big benefit, but there are only an estimated 12 such cars in Eugene right now. 

Major appliances such as water heaters could benefit from communicating with a smart meter that would operate them at the cheapest times. But no such smart meter-friendly appliances are for sale now, and there’s no industry standard to make them compatible.

It’s also unclear if the cost of the meters is the cheapest way to reduce power use. A $40 water heater timer can shift about a quarter of a home’s electric use to off peak time. The utility could also change its rate structure, which encourages waste by charging large customers less than half the rate per kilowatt-hour as residential users.

As for climate change, most carbon pollution locally is from driving, since EWEB power is only about 6 percent fossil fuels. 

Gray says the utility will save about 15,000 gallons a year of fuel used by meter readers. But the utility hasn’t said how much embodied energy and carbon pollution are in the 86,000 meters it may throw away. 

EWEB will save money by eliminating 15 meter reader positions. But meter readers cost as little as $6 per year per meter at other utilities. At that rate, it would take about 83 years to recoup the $500 cost of a radio meter.

Smart meters have been highly controversial elsewhere. Two years ago, The New York Times wrote about how radio meter cost had prompted citizen “revolts” in Connecticut, Texas and California, where Gray worked as a consultant and for the PG&E corporation before coming to EWEB last year.  

The Wall Street Journal chimed in with a headline: ‘Smart Meter, Dumb Idea?’ The Journal reported “howls of protest” from consumers to the billions of dollars in cost passed on to ratepayers in monthly charges.

 Some of the controversy has focused on fears of radio radiation and violations of privacy. Cell phones emit far more radiation and gather lots of private information. But the fear persists.  

“I wouldn’t place my bed on the other side of the wall from a smart meter,” Councilor Alan Zelenka said.

The EWEB board won’t give its final approval on full-scale radio meter deployment until this spring, although the public utility is already retraining its meter readers. 

Deployment is scheduled for late 2012 after a 100-meter pilot project. The pilot won’t include a random sample, or charge volunteer participants, including EWEB board members and employees, for the cost of the meters.

Gray said EWEB may allow individuals to opt out of getting the new meters, but he didn’t say whether the utility would then charge those people less, or more.