New meter to crank up power bills

COMMENT: Section 64.04 of the 2008 Utilities Commission Amendment Act (Bill 15) says that BC Hydro "... must install and put into operation smart meters ... by the end of the 2012 calendar year"
http://leg.bc.ca/38th4th/3rd_read/gov15-3.htm

BC Hydro has information about its Smart Metering & Infrastructure Program on its website.

Tentative costs for the smart meters component is $480-$530 million, and the entire program may cost $930 million. Ahem. In answer to the question, "Which technology will be used?", BC Hydro says, "No decisions have been made yet as to which technologies may be deployed." So much for the comfort level with the early estimates.

And in answer to the impact on electricity rates, BC Hydro says, "... impact on electricity bills ... is unknown at this time .... However, we expect the rate impact to be neutral because of the realization of benefits expected." Feeling even more comfortable now.

As to the pros and cons, BC Hydro lists the benefits, again on its website.

There is great value in knowing with a lot more granularity about when and where electricity is used. Assuming that the information isn't locked up by distributors "for competitive reasons" as propietary, it enables policies that can make for more efficient use of energy. It enables distributors to more efficiently target energy not just to an expected load, but to a load they can closely monitor.

But then, there's the cost of the meters and the installation and the meter readers who are now redundant.

And all that capital fleeing the province to the manufacturer of the meters. Oh, sure, we could insist that the meters be manufactured in BC. With BC Hydro buying 1.2 million of them, that's gotta come close to the economies of scale that make manufacturing them here cost-effective - without even considering the economic multipliers and jobs that come as a result. But with the Canadian government's latest desperate offer to President Obama ("The Canadian government has offered the U.S. guaranteed access to the provinces’ public purchases in exchange for a quick waiver of Buy American provisions") hopes of being able to do that are shrinking fast.

If the costs jack up electricity rates, and how can an expenditure of nearly a billion dollars not affect rates, that should reduce consumption. But offsetting that is the matter of inelasticity of demand for electricity and the inability of those on limited fixed incomes to take the hit.

And so on. It doesn't look to me like there will be a clear winner on this one.

Here's one story, from Australia.

Leon Gettler
The Age, Australia
http://www.theage.com.au
August 23, 2009

HOUSEHOLDS face an average $263-a-year leap in electricity bills with the installation of new smart meters that begins in 10 days' time.

A study by the St Vincent de Paul Society says that with smart meters changing billing from a flat rate to one based on the time of use, average bills will rise by 35 per cent, or about $263 a year. For pensioners, the increase will be even bigger - 42 per cent, or an extra $254 a year.

"Some customers will financially benefit while others will be penalised,'' says the report, to be released tomorrow. ''As electricity is most expensive during the day from Monday to Friday, households comprising people that are at work during the day are most likely to benefit.

On the other hand, households with young children at home, the unemployed and age pensioners [those at home during the day] are most likely to be financially worse off."

St Vincent de Paul is concerned that suppliers could misuse the meters' capacity to turn off power, and even turn off individual appliances.

Although consumers could be offered discounts in exchange for allowing the supplier to switch off appliances such as air conditioners, the report says retailers could use it to intimidate late-paying customers, effectively "putting a choker on a household's energy supply".

The report, backed by the Brotherhood of St Laurence, the Victorian Council of Social Service and other charities, will be presented to federal and state governments and energy regulators this week.

It also warns that the Federal Government's emissions trading scheme will add $200 to power bills for the average Victorian household because so much of the state's electricity comes from brown coal.

"Combined, the underlying increase in energy costs [smart meters and ETS] and the potential cost impacts associated with tariff reallocations … may increase domestic energy bills [by] as much as $490 per annum."

Electricity retailers have already warned that they will need to raise prices because of new information technology systems and the need for more employees to process the extra information. Instead of four sets of readings a year from a household, they will get more than 17,500, at half-hour intervals.

Domenic Capomolla, chief executive officer of second-tier retailer Simply Energy, said bills could rise by more than $100 a year, possibly a lot more. "One hundred dollars to $150 is a conservative number,'' he said.

The smart meter roll-out, which begins on September 1, will take an estimated four years to cover the state's 2.6 million households and 300,000 small businesses.

The first meters will be placed in homes in Broadmeadows and Melbourne's northern suburbs by distributor Jemena. Spokesman Scott Parker said the smart meters provided a much better service.

Powercor, which covers the area from Werribee to the South Australian border, and Citipower, which focuses on the inner city, will begin installing in October.

Where electricity retailers now send someone out to read meters four times a year, smart meter technology monitors the electricity consumption of households and businesses remotely, doing this every 30 minutes.

The St Vincent de Paul report warns that this will create "winners and losers" and that the meters themselves would cost $80 a year.

A spokeswoman for Energy and Resources Minister Peter Batchelor disputed the $80 fee. She said the Australian Energy Regulator's draft determination suggested the annual meter charge would average about $53 in 2010 and $25 in 2011.

She rejected suggestions that smart meters would increase costs for those least able to afford it, pointing out that the Government had brought in legislation last year requiring the independent Essential Services Commission to monitor and report on electricity prices and products. She said the Government had the power to step in if it saw that prices were "unreasonable".

"There are a range of protections available to protect vulnerable people, such as pensioners, and ensure that they can afford electricity,'' she said.

''Retailers cannot, for example, just switch the power off if someone cannot afford to pay their bill. They must work with them to develop suitable alternatives. Anyone who has problems with their energy retail company can also call the energy ombudsman who can help negotiate an appropriate solution."