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Smart Meters

by Marcus Banks, Nov 29, 2006

In the aftermath of last summer’s blackout in northwest Queens, the one question many New Yorkers seemed to be asking was: How come nobody knew how many households were without power?

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But a few weeks later, a similar situation was averted in Kips Bay in Manhattan, when Con Edison, the city’s leading utility, used its access to real-time information of energy use to go door-to-door to area businesses and encourage them to use their electricity sparingly.

If knowledge is power, knowledge of power is essential for Con Ed to maintain the city’s power supply. But now some public officials both nationwide and in New York City are asking a different question: What if residents of every apartment also had access to real-time information about their own electric consumption? Would it change their behavior – and benefit the city as a whole? This is the promise of what are being called smart meters.

The price of electric power is based on the price in effect at the time of peak demand. The typical bill from Con Ed contains a graph that shows how these prices fluctuated throughout the month. Standard meters closely track how many kilowatt-hours each consumer uses, and the peak points of use per day, but are not designed to convey this information to consumers. Smart meters -- “communication systems that can capture and transmit energy use information as it happens”, according to the New York State Energy Research and Development Authority -- allow consumers to keep much better track of their power usage. For example, if you discover that the peak period of energy use on a Tuesday usually comes around 3:30 PM, you can run the dishwasher Tuesday evening and save money. Some smart meters can even inform consumers when their energy bill is approaching a pre-selected amount.

Given these more robust functions, it is not surprising that smart meters cost more than standard meters. A standard meter retails for around $30, while smart meters can cost anywhere from $100 to $600. However, this greater initial investment should pay for itself in energy savings over time. Advocates of smart meters estimate that consumers will reduce energy consumption by 10 percent, thereby lowering their bills.

It is hard to argue with the benefits of reducing strain on the energy grid, while simultaneously reducing electric bills. But it is worth keeping in mind that smart meters are not a panacea for our energy challenges. After all, smart meters do not encourage reduction in energy usage so much as redistribution of energy usage. If every city apartment made use of the information available on smart meters, it is theoretically possible that the peak loads we experience today would come to be evenly distributed throughout the course of a 24 hour period. This would soften the peaks and save consumers money, but not reduce overall electric consumption very much.

This is a philosophical quibble; it is much more likely that peak load times will always exist, so that any shift away from usage during those times is positive. My larger concern is about the heavy focus on private apartments, given that the city’s largest consumers of energy are major corporations. Most office buildings leave their lights on after hours, and Times Square is not Times Square without the wasteful use of electricity.

While it is good to encourage individual conservation, a truly comprehensive conservation strategy would focus more heavily on the private sector. For a city expecting to add 1,000,000 residents over the next 20 years, smart meters will not solve our energy challenges.

On Nov. 14, 2006 the City Council’s Committee on Consumer Affairs considered a resolution sponsored by Councilmember Gale A. Brewer, which calls upon the New York State Public Services Commission “to allow individual apartments to access real-time energy pricing through the use of smart meters”.

In August 2006 the Public Services Commission issued an order directing all state utilities to “develop and deploy, to the extent feasible and cost effective, advanced metering systems for the benefit of all customers”. The state’s move followed passage of the federal Energy Policy Act of 2005, which established strong national incentives for the installation of smart meters .

Given this history, the City Council’s recent actions are an attempt to expedite the inevitable installation of smart meters. Thirty-one states have already experimented with smart meters, and some analysts expect a 20 percent increase in smart meter usage each year for the next decade .

Smart meters are not a bad way to encourage conservation. But we must be smart enough to recognize that installing a better meter is no substitute for developing a comprehensive conservation policy.



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