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Consumer Advocates Question the Benefits of Smart Meters

AARP says more consumer protection is needed

by Maureen West, From the AARP Bulletin Print Edition, March 1, 2011

En español | When retirees Michael and Rita Sabo of Escondido bought an electric car, they decided to try to reduce their home energy usage by 3 kilowatts a day to make up for recharging it.

Each evening, they go online to check their power usage. The daily review has inspired them to conserve energy by:

  • waiting until they have a full load to run the clothes washer;
  • allowing the laundry to air-dry instead of using the dryer; and
  • wiping down the oven by hand rather than using its self-cleaning feature.

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Their new lifestyle has saved more than enough energy to cover their car's nightly recharge.

The Sabos, who are now coaching some of their neighbors about trimming energy costs, are big fans of the new transparency in energy consumption. But AARP and other consumer advocates say there's a potential downside: higher costs to offset the meter installations and higher electricity prices during peak hours — when many retired or homebound people rely on power.

The California Public Utilities Commission (CPUC) says the time-of-day rates will be optional, but consumer advocates fear they will become mandatory.

"What concerns us is forcing consumers into time-based pricing schemes where seniors and disabled consumers will end up paying more simply because they do not have the option of moving their energy consumption to off-peak hours," said Casey Young, AARP California associate state director for advocacy. "We will be fighting to make sure that consumers are not mandated or defaulted into these pricing schemes."

Mindy Spatt, spokeswoman for The Utility Reform Network (TURN), which has sharply criticized the smart meter rollout in California, said time-of-day pricing will mean "some consumers will benefit, but others will see higher bills, and we don't think that is fair."

Smart meters allow utilities to track power usage in homes and commercial buildings through cellphone-like radio signals. They are gradually replacing conventional electric meters and the workers who read them. California's three biggest utilities — Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric — expect to have nearly 17 million electric and natural gas smart meters installed by 2012, serving almost all their customers.

Consumer advocates also are concerned that the meters will make it easier for utilities to cut off power for late payments. In the past, someone from a utility knocked at the door before disconnecting a meter.

"Utilities used to pat themselves on the back for being a presence in neighborhoods. They were another pair of eyes to spot residents who needed help," said independent consumer consultant Barbara Alexander, who helped prepare a report on the meters for AARP, the Consumers Union, Public Citizen, the National Association of State Utility Consumer Advocates and the National Consumer Law Center.

Spatt said the utilities should bear the cost of installing the new meters, rather than passing it on to consumers. "Statewide, the tab is close to $5 billion. These meters are not necessarily going to deliver benefits that will make it pencil-out for consumers."

Industry representatives say customers will benefit later because consumer awareness and peak energy pricing will reduce the future need for new power plants.

San Diego Gas & Electric officials argue that smart meters help customers better monitor their energy consumption. They note that without smart meters, customers have to wait until the end of the month to know what their energy bill will be, but with smart meters they can check online every day and learn when they are using the most energy.  “Customers will also have the choice of deciding which rate schedule they prefer to be on,” said Ted Reguly, director of the smart meter program office for SDG&E.  “For example, those home during the day might prefer a flat rate vs. the peak time rate.”

Alexander urges state regulators and lawmakers to create additional consumer protections to keep up with the technology. Privacy is an issue, she said, because utilities are gathering an immense amount of information about how we live. They know when you are home and what appliances you are running. "Many businesses would love to have access to that kind of information."

April Bolduc, SDG&E communications manager, said smart meters will not be able to tell utilities what appliances customers are operating.

Resistance to smart meters in California has led to lawsuits and legislative action. Some communities have called for moratoriums on installing the meters, but regulators have denied the requests.

Roughly 8,000 consumers have contacted the CPUC about possible overcharges and the health effects of the meters' radio waves, according to Terrie Prosper, a commission spokeswoman.

The CPUC recommends that customers with concerns about smart meters call their utility company first. If they still aren't satisfied, they can file a complaint by calling 1-800-649-7570 or by going online to cpuc.ca.gov/puc. Complaints about radio waves should be directed to the Federal Communications Commission, not the CPUC, at 1-888-225-5322.

Maureen West is a freelance writer based in Phoenix, Ariz.