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Report: Meters falling short

Smart meters are all the rage in utility circles these days.

The digital consumption counters are increasingly popular among power companies because they allow back-and-forth communication between utility and consumer. Companies say such two-way conversations will save them on operational costs and let them create pricing programs for consumers who want to shift power use to cheaper, off-peak hours.

Local power utility NV Energy has its own smart-meter proposal pending before the Public Utilities Commission of Nevada. The company’s $301 million Advanced Service Delivery initiative would replace all 1.45 million power meters in the state with digital meters. The move would save the utility $35.6 million a year in operating costs.

But a Tuesday report found that smart-meter initiatives nationwide are falling short of their potential to curb energy consumption, because they don’t include the technologies ratepayers need to take control of their power use.

The American Council for an Energy-Efficient Economy, a Washington, D.C., nonprofit, said utilities and consumers could be leaving up to $35 billion in power-bill savings on the table over the next 20 years. With the right technologies and programs, the council said, consumers could cut residential power use by as much as 12 percent nationwide.

“The bad news is, smart meters don’t get the job done,” said Steven Nadel, the council’s executive director. “The good news is, we have the tools already in hand that can be combined with smart meters to achieve significant new levels of energy efficiency.”

The nonprofit evaluated 57 ratepayer-feedback programs between 1974 and 2010 to determine what types of plans curbed power consumption the most. Their findings: The three best approaches included enhanced billing, which shows ratepayers how their power use compares with consumption among neighbors or other similar consumers; daily and weekly use feedback via in-home energy displays; and real-time use data over the Internet.

Robert Stewart, NV Energy’s senior vice president of customer relations, said the utility’s executives agree with the council’s findings on energy conservation, and that they’re working on some of the very programs the group cited in its report.

The utility is developing a Web-based feedback system that will let customers see their previous day’s use by the hour and monitor their bill to date. The Web application will be operational by April, when NV Energy plans to have 130,000 ratepayers enrolled in a pilot program to test smart meters and demand-response programs. Web tracking will be available to all ratepayers once all smart meters have gone live in 2012. The utility is also looking at optional features to send alerts to smart phones or other devices the minute a ratepayer’s bill crosses a certain threshold.

Ratepayers without computers would be able to phone the utility’s customer-service call center for information on their bill to date. NV Energy is also considering enhanced billing for ratepayers without Internet access.

Beyond the Web, NV Energy is weighing in-home energy displays that would update ratepayers hourly on the cost and use of power and let them move power use to off-peak times. The question is how to get the devices into the hands of consumers most likely to use them. The displays cost around $250 — an expense that might turn away ratepayers. NV Energy conducted a small trial in 2009 with the displays, and found that 40 percent of users conserved around 10 percent, even without dynamic-
pricing signals. Another 30 percent saved roughly 5 percent. The remainder didn’t conserve.

“The issue here is to find ways to package this so it ends up with people who will take action, and not just try to blanket the market with (the displays),” Stewart said.

Among the possible solutions: Bundle displays with enrollments in programs, perhaps in the same way NV Energy gives programmable thermostats to the 60,000 volunteers in its Cool Share program to curb air-conditioning use on hot summer days. The company might also let customers defray the cost of a display with savings. The ratepayer who saves $15 a month through conservation could apply those savings to the display’s purchase.

Despite efforts to promote demand-response measures, some consumer advocates don’t believe ratepayers will benefit from such programs over the long haul.

During May’s Public Utilities Commission hearings on NV Energy’s proposal, Patrick Morton, an economist with the state Bureau of Consumer Protection, pointed to a different energy-saving technology that hasn’t fulfilled its promise. Just a third of Americans own programmable thermostats, and fewer than a fifth of those owners use the devices to change their home’s temperature when they’re away. And an analysis of nearly 20 pricing studies nationwide found that time-of-use rates in some studies were ineffective at sustaining new consumer behaviors.

“Our concern is, after two years, what happens? When people start on a program, they’re eager to change habits,” Morton testified. “It’s like a race. You start out very fast, but you lose your interest and energy. What’s of concern is changing long-term behavior.”

But Stewart said demand-conservation programs are effective if utilities give “the right kind of information to the right market segments.” Plus, emerging technologies that automatically shut off pool pumps or other appliances when power costs reach a certain hourly peak will make conserving less of an effort, he said.

Contact reporter Jennifer Robison at jrobison
@reviewjournal.com or 702-380-4512.

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