Pepco has installed smart meters in the homes of DC rate payers, replacing the old analog electric meters. The rate increase proposal would increase ratepayers’ electric bills, in part, to help pay for that change. AARP research has found that there can be winners and losers, among smart meter users. Reading excerpts from the research which are in this article can help you decide where the money should come from to pay for the smart meters.
A smart meter is a digital device that records electricity usage on an interval basis.
Smart meters are equipped with wireless communications technology that transmits the consumer’s usage data to PEPCO and can also send pricing data from PEPCO to a smart thermostat or in-home display located inside the consumer’s home. According to PEPCO, meters will accumulate data in 15-minute intervals which will be sent to PEPCO every four hours.
Currently, the price of electricity for most electric consumers does not reflect the fact that the cost of production varies dramatically throughout the day as electricity demand changes. With smart meters, utility companies can gather the information needed to reduce their operational costs, and offer consumers the opportunity to better control their electric utility costs.
How? Utility companies can charge consumers different prices for electricity depending on the time of day the electricity is used. If lower electricity prices cause people to shift some of the electric usage away from peak demand periods, that will reduce the stress on utility company generators and transmitters. It will also allow consumers to save money. For example, consumers might use certain home appliances during low usage periods of the day rather than peak usage periods.
However, it’s uncertain how many consumers could or would reduce their electricity bills through the use of dynamic pricing systems. Some consumers, such as those who use electric medical equipment, may not have the ability to shift electric usage to a lower demand period. High-income, high-use consumers might benefit from dynamic pricing systems more than low-income, low-use consumers. Either way, by shifting usage away from high demand periods, the utility company stands to save money by reducing the stress on the utility system.