That's the question that hung over Wednesday's hearings into whether NV Energy can charge special rates to opt out of its smart-meter program.
NV Energy contended in its testimony to the Public Utilities Commission of Nevada that smart meters mean grid stability for all customers, whether or not they use the devices.
Plus, part of the purpose behind smart meters is to cut operating costs by reducing the need for meter reading. Ratepayers who opt against smart meters eat into those savings. That's why they should pay a fee, company officials argued.
But a utility consultant testifying for the state Bureau of Consumer Protection said the $35 million a year in operating costs NV Energy will save with smart meters could more than cover opt-out costs.
"The problem now is trying to increase rates in a declining cost environment, and that does not sound reasonable to me," said James Dittmer, a consultant with Missouri-based Utilitech. "They're not setting a (higher) rate for (revenue) recovery. They're trying to keep profits for shareholders. That's the unfairness I see."
The Public Utilities Commission approved NV Energy's smart-meter program in 2010, but some ratepayers object to the devices because of privacy and health concerns.
To accommodate those worries, the commission is weighing three options in hearings through Friday. It's considering NV Energy's proposal for a digital meter that allows remote drive-by readings. It's also looking at noncommunicating meters that require a manual read. Finally, it is looking at prepaid meters, which work like pay-as-you-go cellphones that require customers to charge a certain amount before they can use power. The prepaid meters are an option because they don't emit the radio-frequency waves that concern smart-meter opponents.
Opt-out costs will depend on the device chosen to replace smart meters. NV Energy suggested in May a one-time local opt-out fee of $98.75, plus a monthly charge of $7.24, for drive-by meters. For a manual-read meter, utility officials said in December that they would need to charge a local one-time fee of $178.03, and a monthly fee of $14.04, though the company hasn't updated that number.
Consumers aren't allowed to comment during evidentiary hearings, but about a dozen ratepayers opposed to smart meters attended Wednesday's session. They made their feelings known informally during testimony.
When Gary Smith, NV Energy's director of customer energy solutions, listed smart-meter benefits including automatic email alerts that ratepayers can set up when they have passed a certain dollar threshold on their bill, the crowd grumbled, and an audience member said, "We don't want that!"
And as James Christensen, the utility's director of meter services, explained how different devices collect power-use data, another ratepayer said, "So stupid!"
Most smart-meter opponents want to keep their analog electric meters. NV Energy has said in previous filings that analog meters aren't practical because they don't store power-use data, and that goes against state and utility policies to promote conservation. The Public Utilities Commission is not considering letting ratepayers keep their analog meters.
Chris Edwards, the Republican candidate for Nevada's 1st Congressional District, also stopped by commission offices just before the hearings began to tape a commercial for smart-meter opponents. In his spot, Edwards called the meters "very invasive devices" and said he would propose opt-out bills if he wins election.
AARP also had a representative at the hearing. Barry Gold, the group's local director of advocacy, filed a statement with the commission noting that customers who opt out "should be required to pay the just and reasonable costs" of leaving the system. The filing said NV Energy should also have to minimize costs of opting out.
The commission will issue a decision on opt-out meters and fees in November, but that won't be the end of the issue.
NV Energy agreed to review opt-out programs and fees in its next general rate case, scheduled for 2014. It will then decide, with the commission's permission, whether to discontinue opt-out fees or make them permanent.
Contact reporter Jennifer Robison at email@example.com or 702-380-4512.