Consumer Advocates Question the Benefits of Smart Meters

AARP says more consumer protection is needed

by: Maureen West, from: AARP Bulletin, March 1, 2011

Rudolph and Catherine Soto outside their Glendale home. — Andy Delisle/Wonderful Machine

Rudolph and Catherine Soto of Glendale have an electricity plan that charges higher rates from 3 to 6 p.m. Both in their 70s, the retirees avoid using the clothes dryer or dishwasher during those hours. They check their energy use online twice a month through their utility's "smart metering" system, and they have been able to cut back when the bill looked like it might be too high.

Last year, they saved about $400 and they expect to save even more this year. "When we started to see some savings, it got our attention," Catherine said.

In Arizona and almost every state, smart meters, which allow utilities to track and control power usage in homes and offices by using cellphone-like radio signals, are rapidly replacing traditional electric meters — and the workers who read them.

Arizona's two utility giants, the Salt River Project (SRP) and Arizona Public Service (APS), have installed smart meters in 1 million households. Most of the rest of the state, another million homes, will be hooked up by 2013.

With the new metering system, customers can go online and compare energy use daily, even hour to hour. That helps them better estimate their energy costs for the month. Mike Lowe, SRP customer service manager, said the new information can help those on fixed incomes see whether they need to cut expenses elsewhere or reduce their energy use.

Tammy McLeod, vice president and chief customer officer for APS, said smart meters also help utilities restore power more quickly after storms because they don't have to wait for customers to report outages. With the smart meters, utility workers can better pinpoint areas with outages and get repair crews out faster.

Concern over remote cutoffs

While the long-term goal is to reduce peak demand for energy, the new meters have their critics. Consumer advocates, including AARP, the Consumers Union, Public Citizen, the National Association of State Utility Consumer Advocates and the National Consumer Law Center, are concerned that smart meters will allow utilities to disconnect customers without sufficient warning.

"People shouldn't have their electricity cut off in Arizona's heat without having a visit from a utility company employee," said Steve Jennings, AARP Arizona associate director.

Utility officials say they will make phone calls or send e-mails, but independent consumer consultant Barbara Alexander, who helped prepare a report on smart meters for AARP and other consumer organizations, said those methods don't work for many frail or mentally challenged older people.