Smart meters not-so-smart idea for residential users?

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The Ontario government may be right on schedule with its goal to hook up 800,000 homes with so-called smart meters, but a local consumer advocacy group doubts if the device will be practical for residential users.

Premier Dalton McGuinty had earlier charged the Ontario Energy Board (OEB) with overseeing deployment of smart electricity meters in 800,000 homes in the province by the end 2007. The deployment is supposed to cover the whole of Ontario by 2010.

However, the Toronto-based Energy Probe thinks the cost of deploying the device outweighs its benefits, especially when used by low energy consumers such as homeowners. Energy Probe is a consumer and environment research team dedicated to resource conservation, economic efficiency, and effective utility regulation.

“We support smart metering only when their use can be justified,” said Thomas Adams, executive director of Energy Probe.

Smart meters generally refer to meters that identify consumption in greater detail than conventional meters and communicate that information via a network back to local utilities and to users for monitoring and billing purposes.

Depending on their features, Adams said, smart meters can cost anywhere from $400 to $500 per unit.

The OEB, however said, the price of each unit is around $250 including management cost. The amount has been rolled in with the special pricing rate smart meter users get, according to the OED.

Adams said the average power consumption of Toronto residents is around 1,100 Kilowatt Hours (KwH) per month. “The real energy saving benefits will likely be realized by users who consume around 3,000 KwH per month or more.”

Power users at this level are usually businesses.

If used by households consuming 700 KwH per month, smart meters could end up costing the government more, Adams pointed out. “The cost of meter management using old meters is about 50 cents per unit. The cost of management for smart meters can go up to $5 per unit.”

A spokesperson for Milton Hydro, the project’s earliest adopter said smart meters need to be deployed with an appropriate sliding payment rate, and that users should be notified about their energy consumption in a relevant manner.

“It’s not the smart meters alone. The real trick is to couple the device with a pricing rate and data feedback to consumers,” said Don Thorne, president of Milton Hydro Distribution Inc.

Sylvia Kovesfalvi, communications adviser at the Ministry of Energy said so far 125,000 residents in the province have smart meters and the program is running on time.

Since 2003, the municipality of Milton has deployed smart meters in some 6,000 homes, but it was only last October that a so-called time-of-use pricing scheme was implemented.

Thorne said cost savings analysis are still in the works, but energy savings are expected to be around 10 per cent per household.

The current energy rate for residential users in Ontario is 5.8 cents per KwH.

According to Vanda Wall, communications adviser of the Ontario Energy Board, the pricing scheme for smart meter users allows consumers to shift energy use to off peak hours.

For instance, rates for winter months from November to April are 3.5 cents per KwH during off peak periods (10 pm – 7am), 10.5 cents per KwH during peak periods (from 7 am – 11 am and 5 pm – 8 pm), and 7.5 cents per KwH during mid-peak times (11 am – 5 pm).

Adams of Energy Probe, however, doubts if the strategy will work with low energy consuming residents. For instance, he said, people’s refrigerators have to be on throughout the day, while viewers watch television programs depending on the schedule of their favourite shows and not power consumption periods. “Factories, on the other hand, can shift production time to take advantage of off peak rate.”

Jay Evensen, director of business development for communications network firm Cellnet Technology Inc. of Alpharetta, GA, agrees with Thorne on the need for a data feedback capability to the users.

Regular meters are traditionally read manually by utility personnel on a monthly basis, according to Evensen. A resident receives a record of his household’s consumption along with the electricity bill.

“What we need is a system that can provide an hour-by-hour report on energy consumption so that a users can alter their power [consumption] more accurately and realize greater savings,” said Evensen.

He said smart meters offered by Cellnet incorporate a radio module that allows the meters to transmit data to monitoring stations that in turn can send the information to power providers and users.

Cellnet modules are supporting smart metering in over eight million electric meters and three million gas and water meters. The company intends to install more than five million meters in the southern California area, but the utility approval and selection process for the project is not complete at this time.

Evensen said the meters also support power monitoring for utilities. For instance, the meters can be programmed to alert monitoring stations about energy theft or meter tampering. The devices will also report on the exact location where a sudden drop of voltage occurs.

“Currently these functions are not automated. In most cases, manual reading has to be carried out to determine where power theft or voltage drops are occurring,” said Evensen.

Thorne of Milton Hydro said his municipality is also testing other reporting schemes to enhance the functionality of smart meters.

The utility provider is working with the University of Waterloo to develop a Web-based portal for consumers that allows informs them of their individual power consumption. At the moment though, the system only reports about readings done on the previous day.

Another project, Thorne said, involves providing users an analysis of their consumption habits. “We will be able to inform users on a weekly basis, what appliances are using up the most energy.”

The greater challenge, according to Thorne, however is how to change consumer habits.

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