Millions of smart meters are being installed on homes acrossCalifornia. Mandated by the California Public Utilities Commission(CPUC), all investor owned utilities (IOU) including Southern California Edison (SCE), Pacific Gas & Electric (PG&E), and San Diego Gas& Electric (SDG&E) are installing smart meters at residentialand business customer properties. Smart meters are the residentialpoint of information collection for the smart grid. They will connectyour home to smart grid in much the same way a cable or DSL modemconnects your home to the internet.
While most homeowners are familiar with the installation of smartmeters on their homes, many are seeking more information about the smart meters’ impact on their electric bills and their ability to lower orcontrol their electricity costs with solar in this new “smart grid”enabled world.
1. Definition of a smart meter
Smart meters are digital devices that record the amount of energy youuse in your home and send this information to the utility company. Smart meters are the digital replacements of their predecessors, the old electro-mechanical analog meter. They have a digital display and areabout the same size as the old analog electricity meter.
The new electric meters provide two-way communication between yourhome and the utility. These new meters use secure wireless networktechnology or powerline technology to communicate your usage data to the local utility. The utility uses the information from the smart meter to calculate your energy use and your monthly electric bill.
2. Why the utilities are installing smart meters
Utility companies around the world are installing smart electric metersfor many reasons. Those include efficiencies related to remote meterreading, fixing service disruptions remotely, and as a first step in the rollout of smart grid technologies in their service areas. One of thecritical factors driving smart meter technology is the need to matchelectricity consumption with the real time demands on the grid.Utilities are increasingly challenged during high usage times such ashot summer afternoons when air conditioning loads can place tremendousstress on the grid. The smart grid promises to aid utilities in theirability to balance grid demand in their service areas in real time.
Traditional analog meters track total consumption. Smart meters allow the utilities to track when electricity is used in a household and thus match the time the energy is beingconsumed with amount of electricity consumed. Utility customers will beencouraged to shift their energy consumption to ‘off peak’ hours duringtimes of high demand through a combination of lower electricity ratesand higher baseline allowances.
3. Who will receive smart meters in California
By 2012, every electricity consumer of the big three IOUs will have smart meters. Source CPUC April 2009.
4. How the CPUC envisions smart meters will reduce energy use
Smart meters track electric use in fifteen minute increments. The goalis to help consumers understand their electrical and gas usage so theycan make decisions to reduce and control energy costs. Additionally, by linking electricity costs to grid demand, the hope is that userswill shift consumption to ‘off peak’ times thereby helping to avoidbrown and black outs during hot summer months and other high demandtimes.
From the CPUC website: The California Public Utilities Commission (CPUC) has authorized the state’s investorowned utilities to replace conventional customer meters with smartmeters in order to give consumers greater control over their energyuse. Smart meters enable a utility to provide customers with detailedinformation about their energy usage at different times of the day,which in turn enables customers to manage their energy use moreproactively.
The benefits of smart meters to customers, the state, and utilities, include:
- Allows for faster outage detection and restoration of service by autility when an outage occurs and therefore, less disruption to acustomer’s home or business.
- Provides customers with greater control over their electricity usewhen coupled with time-based rates, increasing the range of differentpricing plans available to customers and giving them more choice inmanaging their electricity consumption and bills.
- Smart meters enable a utility to measure a customer’s electricity usage in hourly increments.
- If a customer elects to participate in time-based rates offered bythe utility, they have the opportunity to lower their electricity demand during “peak” periods (the peak period for most utilities are summerafternoons) and potentially save money on their monthly electric bill.
- Allows customers to make informed decisions by providing highly detailed information about electricity usage and costs.
- Helps the environment by reducing the need to build power plants, or avoiding the use of older, less efficient power plants as customerslower their electric demand.
- Increases privacy because electricity usage information can berelayed automatically to the utility for billing purposes withouton-site visits by a utility to check the meter.
- Smart meters are the first step toward creating a smart grid in California.
5. Smart meter online utility resources
The utilities have a wealth of information and in many cases, easy to watch videos, online:
- San Diego Gas & Electric, “Smart Meter”: http://www.sdge.com/smartmeter/
- Southern California Edison, “SmartConnect”: http://www.sce.com/CustomerService/smartconnect/default.htm
- Pacific Gas & Electric, “SmartMeter Technology”: http://www.pge.com/myhome/customerservice/smartmeter/
6. How a smart meter works
A smart meter tracks your home’s hourly use of electricity and/ornatural gas in fifteen minute increments. The smart meter then sendsthe data to your utility.
7. How you can measure your power consumption with a smart meter
Your new electric meter records your kilowatt hour usage to date.Utility customers with smart meters can access their energy usagethrough their account information on line and by reading their meter onsite. On average the smart meters automatically scroll through different displays. Each display remains on screen for three to five seconds. The screens and the amount of time vary slightly depending on whetheryou are in SCE, SDG&E or PG&E territory.
Generally the screens read out your kilowatt hour usage to date. Akilowatt-hour (kWh) is 1,000 watts of electricity used for one hour.
Pacific Gas & Electric: There are two different types of meters in use in the PG&E territory. Information for how to identify which type of meter you have and theinformation displayed can be found online here.
8. How a smart meter affects your energy bill
The impact of the new smart meter on your electric bill will vary. Homes with older analog meters will see the highest potential increasein electric rates. The mechanical analog version can slow down overtime as the bearings and other mechanics wear out. Analog meters canbecome increasingly inaccurate as the mechanism becomes older. When the new, digital version replaces the old analog meter then your electrical use is more accurately captured and billed. This sometimes results inincreased electricity costs for some homeowners.
The electric smart meter records and communicates hourly use ofelectricity. This capability allows the utilities to bill customers innew ways. One way is called time of use or TOU. Commercial companiesare billed with time of use fees. This fee structure matches the use of electricity with the time it is used. Electricity used during thehighest demand periods of the day are billed at the highest rates. Timeof Use rate plans are now optional for most Californians. Contact yourutility or visit their website(s) for further details concerning TOU inyour area.
Who pays for the smart meter installations?
Information from SCE: Edison SmartConnect is a $1.6billion program authorized by the California Public UtilitiesCommission. Edison SmartConnect is expected to contribute an approximate 1.6 percent increase in customer rates during the installationtimeframe. This slight increase, expected to take effect this year, will not be applied as a line item to customer bills. Rather it will beincorporated in the overall electricity rate. Customers can more thanoffset this cost by actively participating in new smart meter programsand services designed to help save energy and money.
Information from SDG&E: Just like the currentmeters, the cost is part of the overall bill. The cost for smart meters, as with all meters or equipment purchased by SDG&E, is part ofregular business expenses and is recovered in rates.
At its peak, the cost is approximately $2.50 per month. However,there is not a separate line item for smart meters on the SDG&Ebill, and this cost will diminish over time.
9. Smart meters and solar
In most utility regions, smart meters now also record the energyproduction of your residential solar power system. For example,according to its website, smart meter installations for San Diego Gas& Electric customers with solar/net energy metering systems began in November 2010.
10. Solar becomes “an even more valuable” strategy to offset energy consumption in a smart meter world
Three factors are increasing solar’s ability to offset energy costs in a smart meter world. First the cost of solar is at an all-time low. Second, financing options are increasing thus reducing the cost of entry for solar generated electricity to zero. And third, as residentialrate structures more to time of use via smart meter technology the trend of increasing energy costs is expected to continue to rise.
Since residential solar systems produce the most electricity during‘peak’ usage times (generally hot summer months), customers with solarenergy systems are credited for their production at the higher dayrates. Those that can shift the bulk of their demand to the eveningoff-peak times will gain additional benefit as they will book morekilowatt hours (kWh) at the higher day rates while buying neededkilowatt hours at lower off-peak rates. As a result, many of thesecustomers require smaller solar power systems than their counterpartswho have installed solar under current tier based rate structures. Formore information on this energy hedging strategy, click here for a freesite evaluation: http://www.heliopower.com/free-site-evaluation
According to Helen Priest, Director of Emerging Markets, PG&E, quoted here at the Greentech Media Summit, 2011…
“TOU pricing (via smart meters) for residential will be implementedcompletely by 2014. You will see a ‘significant shift in consumerpricing’ where solar becomes even more valuable as part of the mix andneed from consumers in TOU environment."