Tuesday, August 19, 2008

Lowering power usage with smart meters

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Smart power meters can lower power use by 13%. That's not just a couple of standard deviations in savings we're talking about. And if that power consumption cut comes during peak electric use hours, all of a sudden we're into some real dollar savings.

So what are these smart meters?

The BusinessWeek story sums smart meters (sometimes called advanced meters) up:

Hailed as the perfect marriage of high tech and conservation, smart meters replace the discs and dials of yesterday's meters with microchips and digital displays. When there's a blackout, they can instantly notify utility managers about which households are affected, speeding up recovery times. And paired with compatible appliances in the home, the technology can let customers know what power costs at different times of the day, so they can better manage consumption. Their biggest impact may be on utilities' bottom lines: Since the latest smart meters wirelessly transmit usage data, armies of meter readers could go the way of the milkman.
Another thing the smart meters can do (with the agreement of a customer) is remotely turn down appliances that use a lot of energy, with air conditioners being the best example of this. I would welcome this, since a certain anonymous family member runs our AC entirely too much.

So what's the argument against installing smart meters everywhere?

In one word, cost. It's costing more to install smart meters than the utilities projected (I know, shocking that a hi-tech project has cost overruns), and those costs get passed on to the customers.
just two years into the program, the company is already saying it will have to spend $600 million to complete the project, on top of the $1.7 billion already budgeted. That requires an O.K. from regulators, since the costs ultimately get passed along to ratepayers.

The problem? After upgrading hundreds of thousands of meters, PG&E says the smart gadgets came up short. Among other things, they were supposed to send information to the utility over the power lines. But that proved too costly. PG&E is now planning to replace them with sleeker wireless models.

PG&E says that 70% of the project's costs will be made up in operational efficiencies. That better be passed back to customers like the original project costs will be.

How much could I save if my utility adopted smart meters?

It just so happens that my electric utility filed for a rate increase in 2007, part of which would fund a $340mm project to install smart meters. I could find no mention of the smart meters in the 2008 press release for a rate increase, but I'll assume that the project is still on track.

Looking at the first article to which I linked shows the source of the 13% energy savings I referenced at the top of this post:

Quantifying the customer savings is a challenge. Ahmad Faruqui, a consultant with the Brattle Group, has studied more than a dozen smart-meter tests by utilities and helped conduct a statewide pilot program in California four years ago. He says communities using smart meters show an average 13% drop in peak power usage when customer incentives are in place. But there's a catch: Some 80% of the savings comes from just one-third of the customers.
Let's assume I could get a 10% electric power use savings. I used 1,945 kWh last month, so the 10% savings would be 195 kWh (rounding up). My electric utility has two different per kWh charges, supply and delivery. (I live in the Northeast by the way, where rates have been increasing rapidly.)

Charge typeDollar charge

My total savings last month might have been:

kWhxper kWh savings=SAVINGS
195x$0.235887=$46 (rounding up)

Last month was the peak power bill for the year (it had better be!), so in an average month I'd expect savings of around $30 in the best case.

After digging a little bit more on my utility's Web site, I found a page where I can request to enroll in a program that will charge me less for using power in off peak times by installing a new meter that will measure use during specific time periods. I'll be requesting more information from the utility on this program.


The savings calculations were too good to be true

I received information back from my electric utility with information on their time of use program, and there are some big gotchas for me.

First, the utility's definition of peak time is 10A.M. to 10P.M. Monday through Friday. Even though I'm at work for a big portion of that time, I'm usually home from 6:30P.M. to 10P.M, and I'm guessing we're using a fair amount of power during that time.

Second, the charges are greater than my standard rate from above during the peak time, but less at the off-peak time. I'd be paying more than the standard rate from above in that 6:30P.M. to 10P.M window. I don't think I could shift a significant portion of my energy use to a non-peak time.

Third, the supply charge is de-regulated and can change monthly (my current charges are regulated by the state.)

Looking at the charges, the peak delivery charge for time-of-use metering in the summer months is nearly three times my current standard delivery charge. The off-peak delivery charge is about 1/10 my current standard delivery charge. The peak supply charge for time-of-use metering in August is nearly double my current standard supply charge. The off-peak supply charge is about 3 cents less than my current standard supply charge.