Utilities Afraid to Push Hard for Energy Conservation?

Utilities know exactly how to use smart meters to reduce energy use... but they're afraid to do it. That's the conclusion of a recent article from the Wall Street Journal.

Insiders tell us the article accurately summarizes the results from the many smart metering/demand response pilots that have taken place. And accurately describes the conundrum that faces utilities: They know which programs work the best, but they can't put them into place for fear of consumer backlash. Says one member of the California Public Utilities Commission: "It told us there needs to be a lot of consumer education" before making the changes that will bring the full benefits of smart meters and smart grid.

Utilities have learned a lot about how to reduce energy consumption with smart meters, but they're leery of riling up consumers — and taking a gentler and less effective approach than what they actually see as the most efficient solution, according to the Wall Street Journal.

The intelligent meters feed customers detailed information that gives them the option of changing their consumption patterns to cut their energy bills. They also give utilities the information they need to implement pricing based on demand: It's a 'use more, pay more' approach. The smarter meters are considered a key component of the Smart Grid.

It's not hard to understand why utilities, which have conducted a lot of pilot projects with meters deployed to thousands of homes, are gun-shy.

All they need to do is look around at what's happening to other utilities: Dominion Virginia Power recently decided to extend a smart meter field test before moving ahead with a full deployment. After being told by Indiana regulators that one of its metering programs was too expensive and wouldn't do its customers much good, Duke Energy will cut back on one of its meter rollouts.

And, of course, there's PG&E. The company has been sued by customers who claim the new meters are responsible for overcharges on their bills — and California regulators have called for an audit of PG&E's programs.

As the Wall Street Journal story points out, utilities would rather use rebates for customers who cut their power consumption. The problem is, that approach isn't as effective as variable pricing. "You could have a real rebellion" if smart meters hike customer rates, particularly if utilities' capital costs are going up too, Edison International chief executive Ted Craver told the newspaper.

Steven Sunderhauf, a program manager for Pepco Holdings, also said in the article that "From a purist's standpoint, I may prefer critical peak pricing because it gets the boldest response... but using rebates will help people get comfortable with smart meters."

From the source ...

Wall Street Journal

Related SGN resources ...

Smart Grid Metering

Anti-Meter Fever Spreads as Regulator and Customer Mistrust Grows

Smart Grid Backlash: How to Put an End to Consumer Resistance

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