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Smart Metering. Who Pays, You Or The Utility?

Smart Metering. Who Pays, You Or The Utility?

Winter is nearly upon us and here in the UK we have been hearing a lot about how the electric utility companies have recorded record profits and yet still plan to increase prices by 10%. So watch out for some hefty electricity bills this winter.

It also looks like the utility companies are full steam ahead on the implementation of Smart Metering. What will that mean? Does it mean consumers will not only face bigger fuel bills but receive them a lot quicker? Sure, the utilities will say that with Smart Metering you can analyze and monitor your fuel usage more accurately and can therefore budget for lower bills. I don't believe that. If you're cold you turn the heating up; that's if you can afford to, and sadly we have got plenty of elderly people who are already struggling to pay.

Of course the utilities will also say that Smart Metering will help lower their operating costs and that could mean lower bills for consumers. Yeah right.

One thing is clear, the UK and US will experience the largest volumes of cellular meter shipments up to 2016 for clear reasons. In the US, telecoms have reduced the cost of data plans for meters significantly to about $1 (or less) per meter, per month. Utilities are beginning to realize that they can cut capital expenditures by over 40% and reduce operating expenses by using public telecom providers.

Here in the UK, the Department of Energy and Climate Change (DECC) announced its intention to have smart meters in all homes by 2020, although there are public concerns whether such a rapid introduction is wise and whether it represents a greater risk to consumers in terms of cost.

The DECC has also stated, rather naively in my view, that cost savings that energy suppliers make will be passed on to customers but industry observers argue this is an over-simplification. UK consumer groups such as Consumer Focus stipulate there is currently no transparent mechanism in place to limit the financial risk to consumers.


An American View

The American Council for an Energy-Efficient Economy reviewed more than 36 different residential smart metering and feedback programmes internationally. This study concluded that to realize potential feedback-induced savings, smart meters must be used in conjunction with in-home (or on-line) displays and well-designed procedures that successfully inform, engage, empower and motivate people. There are calls from both the energy industry and consumer groups for a national social marketing campaign to help raise awareness of smart metering and give customers the information and support they need to become more energy efficient. That may sound sensible but will the utilities buy into the idea?

In terms of technology there is very little stopping the implementation of Smart Metering; or is there? There are in fact some very important questions that need answering.

Can smart meters guarantee a reliable operating life span of up to 20 years without major overhauls or costly component replacement? Will they use standard operating protocols to assure compatibility with changing energy supplier equipment? And what about consumer data security over wireless networks. Finally, and paradoxically, will smart meters be frugal when it comes to their power consumption?

Meanwhile, best keep a close eye on that room thermostat.

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