Energy Biz - September/October 2008 - (Page 42) also allow consumers to more closely monitor their energy consumption and manage it accordingly. California’s three largest investor-owned utilities are in the process of deploying advanced meters, with a complete rollout anticipated by 2012. While clearly not a trivial endeavor, representing over 17 million electric and gas meters and an investment on the order $4 billion, we believe the business and policy case for this effort is undeniable. For too long there has existed a profound disconnect between the decisions of energy consumers and the implications of those decisions on the supply side of the market. Advanced meters and the congestion pricing they enable provide the means to ensure that customer choices reflect underlying system realities by providing customers the information that to date has not been available to them. In doing so we will ensure that we use our electricity system much more efficiently than we do today, thereby improving system reliability, environmental sustainability, and reducing systemwide costs. In this case, knowledge is, quite literally, power. Michael Peevey is president of the California Public Utilities Commission. California Meters Up BY AL SENIA three california investor-owned utilities have As the effort gains steam next year, the utility companies plan to use the mail, the Web, local meetings and other marketing techniques to inform customers of the change. As the new smart meters are installed, customers will have the process explained to them. All in all, SCE expects to invest $1.9 billion in its smartmetering effort, while PG&E anticipates a $1.7 billion investment and SDG&E will invest about $522 million. Blazing the Trail At this point, PG&E is the furthest along of the three private utilities. The utility began installing the high-tech meters in Bakersfield, Calif. in November 2006. It expects to have 1.5 million smart meters installed in its service area by the end of this year. A total of 10.3 million of the new meters will go to all customers by 2012. PG&E executives note that enhancements in metering technology are being included in upgrades to its program. For example, the latest devices include additional data-communications functions such as load-limiting, connect-disconnecting switches and home area network gateway devices to control a new generation of smart home appliances. James Meadows, director of PG&E’s smart meter project, said that current smart-meter technology allows the utility to read meters remotely and enables it to offer customers demand-response options to reduce electric usage during critical times. The new meters also help the utility do a better job of detecting power outages. Some technology cost savings already are apparent as 22 meterreading positions were closed out when the new technology was installed. “The price and the functionality of the meters is improving,” Meadows noted. “For example, there is more on-board data storage and an increased ability to put better communications devices in meters that go into the home.” Even so, PG&E and the others hope California’s smartmetering efforts will spur continued technology improvements before the bulk of the meters are installed. PGE’s implementation has moved just beyond the prototype stage. Meadows said that some 4,000 customers in Bakersfield signed up for a voluntary program called SmartRate, which includes a special pricing option that provides financial incentives to customers embarked on an ambitious effort to bring smart-metering technology to millions of their residential customers during the next four years to have them exert more control over their energy usage and to reduce demand for expensive power during peak periods. The actions by Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) are endorsed by the state Public Utilities Commission, which hopes the widespread use of advancedmeter technology will result in fewer expensive new power plants being built in California. “We see this as moving the energy industry forward, as a way to reduce peak-load demand,” said Lynda Ziegler, senior vice president of SCE’s customer service business unit. Ziegler and other utility executives believe smart meters will open the door to more efficient energy planning, more control by consumers over their energy use and, ultimately, greater energy conservation. The massive modernization effort will cost more than $4 billion to implement by 2012, with utility customers footing much of the expense through small monthly surcharges on their gas and electric bills. Utility executives also expect that financial savings from the new technology, such as eliminating meter readers and remotely hooking up new customers, will offset much of the initial cost. In its filings with the PUC, for example, PG&E estimated that the average rate increase for its residential customers as a whole won’t vary more than 1.1 percent in the highest year. Most of the state’s utility customers aren’t yet aware of the grand plan to roll smart meters out statewide because much of the implementation is still in the prototype stage. 42 E n E rgyB i z September/October 2008
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