Saturday, July 25, 2015
Consumers still waiting for smart meters to pay off
The new technology has delivered modest savings and greater reliability, but CMP admits its data management needs 'to catch up.'
BY TUX TURKEL STAFF WRITER
email@example.com | @TuxTurkel | 207-791-6462
Since September 2009, Central Maine Power has installed 625,000 smart meters, like these at an apartment building on Portland’s Western Prom. 2011 Maine Sunday Telegram file photo/Gordon Chibroski
Five years after Central Maine Power Co. installed 625,000 smart meters in its service area, most of the company’s customers are still waiting for an opportunity to reduce their monthly bills by taking more control over how and when they use electricity.
The digital meters, which upload a wealth of detailed data about electricity use to CMP over the Internet every 15 minutes, are saving the average homeowner about 85 cents a month, according to state utility regulators.
The bulk of the savings come from operational efficiencies tied to slashing the cost of having workers read meters, leading to 2 million fewer miles of driving each year and conserving 64,000 gallons of fuel. The reduction adds up to $8 million a year.
But the company has fallen behind in making other improvements in its system that would enable homeowners and business customers to realize more savings from the devices And the new meters are still the subject of a lawsuit from critics over their impact on public health.
CMP told the Maine Public Utilities Commission in 2010 that the meters could save customers up to $338 million over 20 years. The company said it would have the early stages of a time-of-day pricing system for electricity available by 2014. That system offers a potential for significant savings for customers – especially businesses – who shift their electricity consumption to off-peak hours, when prices are lower.
But that hasn’t happened. And the company’s failure to meet its 2014 goals prompted regulators to take action and negotiate a settlement that reduced CMP’s rates.
CMP said when the meters were being introduced that they would usher in a new era of energy management and service.
They would allow customers to track and adjust their power use and help CMP respond faster to outages. Over time, they would help match energy supply and demand in an evolving, regional smart grid that integrates more renewable generation, such as wind power.
CMP officials say smart meters will eventually deliver on their promise, but they acknowledge that the company has yet to make the investments needed to enable consumers to take advantage of that potential.
“At present, CMP has a 1970s-era data management system and a 21st century flood of data,” said John Carroll, a CMP spokesman. “We need the rest of our technology, and our understanding of its power, to catch up.”
BILLING SYSTEM ISN’T IN PLACE
Five years ago this September, CMP began replacing its old, analog electric meters in a project that was approved by the PUC and aided by a federal grant that paid nearly half the $196 million cost. The go-ahead and funding were based on an expectation that real-time, interactive communication between the meter and the electricity user would save the company and its customers money.
But even before the last meter was installed in 2012, public attention shifted to a battle over health and safety.
The abilities of smart meters have been eclipsed in media coverage by allegations that the wireless technology enabling their communication contributes to health and safety problems. Those charges have been refuted by CMP, Maine’s public health department and the commission. But official assurances have failed to appease a small, tenacious citizen group, which in May filed a second appeal of the PUC’s approval to the Maine Supreme Judicial Court.
Whatever the legal outcome, smart meters are here to stay in Maine. The question now is when they can realize their potential.
In its 2010 case before the PUC, CMP estimated the total savings to customers at $338 million over 20 years. While acknowledging the number was speculative by nature, the PUC commissioners agreed that the savings would be substantially greater than the cost of installing the meters.
An audit done for the PUC last year, however, highlighted the expectation that CMP would have an interim billing system in 2014 that established a framework for time-of-day pricing, known in the industry as dynamic pricing.
But the billing system isn’t in place. In an agreement to settle the case, CMP and several parties, including the Office of Public Advocate, agreed to a $1.4 million reduction in the company’s rates. In addition, the PUC cut rates by another $450,000 a year until a new billing system is running.
A separate case is underway to set out the cost and capabilities of that new billing system, which CMP says has a target date of 2017.
Harry Lanphear, a spokesman for the PUC, declined to offer an opinion of whether it has taken longer than expected for the billing system to become operational.
“Large billing systems are very complex and challenging,” he said. “Having said that, it’s pretty clear both the commission and CMP want a system that can do dynamic pricing.”
BUSINESSES TAP INTO DATA FOR SAVINGS
Even without dynamic pricing, the details captured by smart meters are starting to save some of CMP’s customers money and improve service reliability.
Home customers are getting their lights back on faster when a storm downs utility lines. Their smart meters are supplying CMP with instant information that makes it easier to assess power outages.
Some business customers are tapping the precise data from the meters – which track consumption every 15 minutes, rather than once a month – to trim thousands of dollars from energy bills. They’re spotting wasteful patterns and identifying hours when high use translates into high wholesale power costs.
Goodwill Industries of Northern New England used the information displayed on a website set up to help homes and businesses track consumption to study electric use patterns at 34 buildings it operates in CMP’s service area. They include 15 stores and donation centers.
“The program gives us the ability to compare our properties and identify those that consume more energy than others,” said Steve Dixon, senior director of purchasing and facility services. “We can analyze the specific usage to understand the root cause. To date, the majority of the findings have dealt with lighting.”
Dixon discovered that lighting in the donation centers was old and inefficient. He’s now replacing 54 fixtures with LED lighting and expects to save $3,100 a year. A similar process is underway at retail stores. A recently opened store in Westbrook is using LEDs that are projected to save $7,000 a year, compared to older stores.
Efficiency Maine, the state’s energy conservation agency, is conducting pilot programs to see how widely this practice can be applied. In one study, it reviewed use patterns from 25 schools by analyzing the 35,040 intervals of data now being collected each year by the smart meters. The study showed some schools were turning on lights and heat too early on winter mornings. Adjusting those patterns could save an average of 15 percent a year per school. The agency is preparing to do a similar study with 2,000 businesses, including hotels and offices.
Another example: CMP gets hundreds of requests daily from competitive electricity suppliers to see their customers’ power-use profiles recorded by the smart meters.
This information, which is shared with the customer’s permission, can determine exactly when electric use peaks during the year. Knowing the precise hour has value, because it’s tied to how much money customers contribute each year to a complex payment system managed by the region’s power grid operator. There’s so much desire now for this information that CMP is setting up an Internet portal for suppliers and customers to access it.
Before smart meters, only large industrial customers knew their peak-use times. That left suppliers to offer rates based on estimates or past usage.
RESIDENTIAL CUSTOMERS LEAST ENGAGED
But again, the new data only hints at what’s possible.
“The capability is there but it’s not unlocked yet, from a billing perspective or time-of-use product,” said Kevin Dean, president of Electricity Maine LLC, the state’s largest competitive electricity supplier. That capability benefits both customers and electric grids in some other states.
GDF Suez, a major energy supplier based in Houston, recently started a program called VRewards. It’s a voluntary program for businesses that agree to cut consumption during high-demand periods. The company alerts participants in the morning when a peak is expected and estimates how long it will last. Customers can decide how to cut back, such as adjusting thermostats or lighting. They get credits up to $500 a month on their bill, based on how much they cut during the critical periods.
Dean said he’d like to offer a program like this to thousands of small businesses in Maine.
At Goodwill Industries, Dixon said he’d be interested in time-of-use rate programs. He said Goodwill could make operational adjustments to save power at its large warehouse and recycling facility in Gorham, which has bailers and other machines.
“At times, they can use a lot of energy,” he said.
CMP’s 550,000 home customers seem to be the least engaged, and it’s not clear how that will change with dynamic pricing. Their electric bills are small compared to a business, and the potential for savings isn’t as great.
Home customers now can track their electric use online and see exactly when they’re using the most kilowatt-hours, if they sign up for an Internet portal called Energy Manager. Roughly 38,000 home customers have done this.
Energy Manager analytics for the month of June shows that the website registered 6,321 sessions that lasted an average of two minutes. Sixty-five percent of viewers visited the site more than once a month.
But it’s unclear how they are using the information to save money. CMP did a pilot study with 3,000 customers with Energy Manager. It sent them text and email messages about their ongoing energy use. Those customers cut their use by 2 percent. On a typical $80 monthly bill, that’s $1.60.
Carroll, CMP’s spokesman, said the savings may not be high enough to attract broad interest.
“Lots of customers would say their electric bills aren’t that high,” he said. “Their phone bill is more. Their cable bill is more.”