Truth be told, the average person may not see a lot of savings as a result of smart metering.
Judy Rosebrugh, president and CEO of Wellington North Power, recently spoke to Wellington North councillors about the impact of smart metering in the municipality.
The meters come at a hefty price, and the costs will be incurred over the long term by those served by the local utility.
Rosebrugh said the provincial government has mandated that by 2010 all low volume customers (residential and small general service) will have smart meters.
In 2008 Wellington North Power will need to retain third party debt in order to meet the government directive. Annual operating expenses for the new meters – $150,000 to $200,000 – will be recovered through future rates, Rosebrugh said.
Smart meters monitor and record how much electricity is used and when it is used. The meters then wirelessly communicate that information to a central computer.
Rosebrugh said when time-of-use (TOU) prices come into effect, prices will vary depending on the time of day, the day of the week, and the month of the year (summer or winter).
The intent of this technology is to provide customers with the information they need to make choices about how and when they use electricity.
Why? Rosebrugh said the government intends to re-open the spot market for all consumers and the installation of smart meters will allow customers to use off-peak hours to run their air conditioners and do laundry and dishes.
As a result, customers will have more control over their energy costs.
Smart meters look like standard digital meters and fit into a standard meter base (modifications are not necessary for most installations). The devices measure and store electricity consumption data over short time periods, usually an hour.
Rosebrugh stressed that Smart Meters do not automate any customer equipment or electricity usage patterns – although there is technology on the market which could be added on to synchronize certain devices with off-peak hours.
On their own, Rosebrugh said, “Smart meters will not automatically result in energy savings.” But they “will allow customers to view their hourly electricity consumption profile and will help them identify periods where they may wish to consider shifting usage to manager their electricity costs.”
When the new meters are installed, there will be a dramatic shift in how electrical use is monitored. Currently, Rosebrugh explained, meters used by Wellington North Power are read once per month, and smart meters will be read hourly.
While the data will continue to be collected by Wellington North Power, the hourly information will need to be correlated and matched with spot hourly pricing for any given time period.
Rosebrugh noted there are some larger general service operations that have made use of smart meters and taken advantage of spot market prices since 2002.
She explained that in June, there were time slots where the cost of electricity was under four cents/kilowatt hour.
Currently residential users are charged five cents/kilowatt hour.
“There is some potential of saving money using the smart metering prices,” she said, adding the government had intended to re-open the spot market electricity prices at some point.
“Historically, the cost of hydro overnight has been much cheaper than during the daytime,” Rosebrugh said.
Therefore, she advised people working during the day to shut off air conditioners at home during the day and move activities such as laundry or using the dishwasher to nighttime hours.
She said meters will be installed in all residences and small businesses in the areas served by Wellington North Power.
While Rosebrugh’s seen daily fluctuations of costs ranging from 9.2 cents/kilowatt hour (peak hour) to 3.2 cents/kilowatt hour (off hours), she stressed the prices are always fluctuating.
But the savings may not be dramatic.
“I believe it will take some time consumers to get used to the new pricing,” Rosebrugh said.
She told council she would also like to see Wellington North Power have the ability for web presentations of billing – or at least a means of letting residents get a better idea of when peak hours are.
But without a government initiative to show hourly prices there is no real benefit to customers.
Councillor Ross Chaulk asked how residents would be able to view their hourly consumption.
Rosebrugh advocated the idea of a web presentation of the information and said people with computers and internet hookup could potentially access this information daily. However, she did acknowledge many people are not hooked up to the internet.
Chaulk foresaw the move as becoming “a horrific use of paper.”
Rosebrugh stated her own view is that the government never really closed the door on spot market pricing in 2002.
However, to be effective, “customers need to be in control,” she added.
Councillor Dan Yake said ultimately this is intended to benefit the consumers, but “if they do not know how much it is costing them, it is no benefit.”
Yake added, “Not many of us have the time to monitor the price of hydro hour to hour.”
Rosebrugh favoured the idea of digital monitors within homes to make residents aware of peak energy hours.
Those monitors are not part of the smart meters and would be an added cost, she said.
Yake countered that to understand the hydro bills now “you almost need to be an engineer to understand them.”
He did not expect providing information on a website would yield better results.
Rosebrugh said the utility had originally expected Smart Meters to be implemented in 2002. The government thinks this is the only way to open the market back up, she said.
Yake still anticipated a public outcry over the costs involved.
“If the public can’t figure out how to use less electricity during the peak times, they’ll view this as a huge waste of money.”
Rosebrugh added that the other issue is that Wellington North Power also faces scrapping a number of current electrical meters which are still in good shape.
“So … you might save $2 if you got up at 2am to run your dishwasher (over a set period of time),” Chaulk said.
Yake stated that Wellington North Power is incurring third party debt to pay for the meters.
Rosebrugh said the funds also include installation and would be paid for over a 10-year period.
The costs would come through user rates.
However, Rosebrugh said if the third party funding does not come through – the utility won’t move forward on the mandated program.
“We’ve stated clearly that without that funding Wellington North Power cannot afford to purchase and install Smart Meters.”
She added that even now, customers are paying some of the costs for Smart Meters, as a result of the utility planning ahead to collect some funds to implement the program.
However, that amount is hardly enough to recoup the cost.
“What we’re collecting is not enough to even pay the interest on a $1 million loan.
“In our case we’d need $3.50 to $4.00 per customer per month just to cover the cost.”
