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What Makes a 'Smart' Meter so Smart?

AARP and Virginia Citizens Consumer Council Express Concern About Cost, Variable Rates

Eric Gilchrist of Charlottesville is ready for the 'smart grid.'

Gilchrist, 55, has replaced old light bulbs with compact fluorescent bulbs. He had extra insulation blown into his attic. He uses a programmable thermostat, six ceiling fans, energy-efficient appliances and power strips that keep his electronic equipment from gobbling power.

His energy-saving efforts — which Gilchrist modestly describes as "a little bit here and there" yield electric bills up to 40 percent lower than his neighbors.

Gilchrist looks forward to exerting even more control over his energy usage with a 'smart meter' installed by Dominion Virginia Power in a pilot project for 46,000 customers in his area.

 Dominion will spend $600 million to swap its 2.4 million residential meters in Virginia with smart meters by 2013. Domionion provides energy to two-thirds of the state.

The Obama administration has set a goal to have 40 million smart meters installed nationwide over the next few years, jump-started by $3.4 billion in stimulus grants nationwide. Dominion did not get a grant, but Rappahannock Electric Cooperative in Fredericksburg received $15.6 million to upgrade to smart grid technology, and Northern Virginia Electric Cooperative in Manassas got $5 million from the Department of Energy grant.

Smart meters can read how much energy is used, and when, so the utility can charge variable rates— more for power used in peak periods, less in off-peak times. Customers can lower their bills by running dishwashers or clothes dryers in off-peak hours.
AARP Virginia and the Virginia Citizens Consumer Council are working to ensure that consumers are protected as the new technology is phased in.

"We're not sure that smart meters are going to give consumers benefits as well as company benefits," said Irene Leech of Blacksburg, the consumer council president.

Madge Bush, advocacy director for AARP Virginia, said, "We are not opposed to smart meters, but it's moving so fast we need consumer legislation."

Utility employees now read meters once a month. Smart meters can provide usage data daily, hourly or even in 30-minute intervals. Eventually the utility will be able to remotely read meters and connect or disconnect power without sending someone out to do it.

AARP will ask the General Assembly to ensure that smart meters and variable rates are voluntary. AARP is concerned that older people may not be able to cut their usage because of medical needs and that some low-income or sick people could be hurt if power is shut off without a home visit. AARP is opposed to pricing tied to the time of day that energy is used.

Richard Rick Walden, director of advanced metering infrastructure for Dominion, said variable rates will be voluntary. "Those who want to participate can. Seniors may not be as interested and can stay on their old rate. Ours is not an opt-out program. It's opt-in," Walden said.

Dominion contends that smart metering and other measures will save its customers $1.2 billion over 15 years. Some of the savings would come from voltage conservation, in which the company reduces the voltage to houses to save fuel and lower costs —but so slightly that residents don't notice.

AARP also is concerned about cost. Dominion estimates each smart meter will cost $225 to $250, payable by customers over time through their electric bills. In addition, customers who want to monitor their own usage will need to buy software or other devices. The two-way communication system will supply energy providers with unprecedented details of customer usage. AARP wants to ensure that information is not shared with third parties or used to market products or services. Walden said it would remain private.

The savings in voltage conservation alone will offset the cost to consumers of higher rates and meters, Walden said. Customers will not have to do a single thing and still be able to save money. Dominion projects smart meters and other technology will cut energy consumption an average of 4 percent.

The State Corporation Commission, which must approve rate changes, has scheduled a hearing for Feb. 10, 2010.

Marsha Mercer is a freelance writer based in Alexandria.

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