Lower utility bills, improved customer service, greater energy efficiency, less dependence on fossil fuels, preventing or forestalling global warming, and the need for fewer power plants are but a few of the benefits promised by smart metering technology, also known as advanced metering infrastructure.

But critics warn that smart grid technology provides utility companies with the opportunity for unprecedented real-time command and control over customers’ energy consumption and, as a result, their lifestyles.

What advanced metering infrastructure does

The most advanced systems enable two-way communication between the utility company and a homes or businesses and vice versa by means of radio frequency and sophisticated computer networks. The systems enable utility companies to remotely collect, read, and transmit data to and from smart devices.

According to Metering.com, a website for utility and customer management professionals, metering systems allow utility companies to perform real-time leak detection, monitor usage, detect tampering, eliminate the need for meter readers, and provide remote connects/disconnects. Such measures boost revenue and lower costs, industry executives and environmental groups say.

By installing special controllers that remotely shut on and off heat pumps, water heaters, appliances, and lights, utility companies can ease peak demand and prevent blackouts or brownouts.

In-home display devices allow customers to monitor their utility usage in real time and control their usage from anywhere by means of the Internet. A volunteer in a pilot implementation of this technology was featured in Business Week on Jan. 11. The volunteer said the technology allowed him and his wife to “reduce their energy use when prices went up.” For example, “if they went to dry clothes, the dryer occasionally suggested they wait until prices declined.” The volunteer and his wife said this experience so enlightened them that, after the pilot program concluded, they decided to switch to an old-fashioned clothesline to help save on energy costs.

Push for legislation

Leading the research, development, and implementation of smart technologies and the push for environmental public policies have been Australia, the United Kingdom, China, and some Middle Eastern countries.

In a study prepared for the Australian Greenhouse Office in April 2000, Michelle Shipworth examined the link between consumers’ attitudes about home energy use and their reported home energy behaviors. People’s environmental actions, Shipworth concluded, are influenced by more than their attitudes, noting that “government policies and regulations support or hinder different kinds of actions.” Shipworth cited a number of studies, one from the United States, reporting that people will shift their consumption to off-peak periods when incentives are provided and they feel obligated to do so.

Shipworth suggested that consumer attitudes can be changed through successful media campaigns that “repeatedly expose the public to the message” and combine “regulation, information, education, and persuasion.” Shipworth said that “effective persuasive appeals should not only activate attitudes but also argue that these attitudes call for environmentally responsible behaviors.”

In 2007, California proposed legislation to grant utility companies the authority to control “unitary heating and air conditioning systems in new buildings,” including new homes, by means of installing “programmable, communicating thermostats (PCTs).” The proposed standards say such measures would be taken only in the case of an emergency. Media reports show some Californians worry whether the definition of an emergency might change over time, making temporary restrictions permanent and voluntary ones mandatory.

A USA Today article in January reported that the new federal energy bill President Bush recently signed outlaws the use of incandescent light bulbs in the next four to 12 years. A spokesperson from the American Council for an Energy Efficient Economy said the change will “save consumers $40 billion in energy and other costs from 2012 to 2030, avoid construction of 14 coal-fired power plants, and cut global-warming emissions by at least 51 million tons of carbon annually,” but no empirical evidence was provided to support the assertions.

Hidden costs

At a time when North Carolinians are grappling with water restrictions, infrastructure needs, and other problems brought on by increased growth, smart technology might appear to provide the solution.

An ABC affiliate in Australia recently interviewed the director of the Commonwealth Scientific and Industrial Research Organisation’s Urban Water Programme, Australia’s largest scientific research organization and a proponent of global warming initiatives. In the interview, an official said one option to increase water efficiency is to install smart meters in households to record the time and cost of showers. The utility companies could introduce premiums for peak-time water usage and a discount for off-peak usage to change consumer habits.

Such solutions might be coming to North Carolina. Gov. Mike Easley recently joked about being able to take a shower in under 30 seconds, and Raleigh Mayor Charles Meeker has suggested that Raleigh citizens might get by on 25 gallons of water per day. In a December 2007 press release, Easley calls for “conservation-based water billing,” meaning a 50 percent surcharge.

Mike Hughes, a spokesman for Progress Energy Carolinas, said the company is evaluating the application of smart devices through a pilot program in North Carolina homes. Smart technology could enable them, for example, to “turn off air conditioners for brief periods on the hottest days to lower the energy load and these measures and others could delay the building of new energy plants,” Hughes said.

Manufacturers and distributors of this new technology are extolling the virtues of time-of-use and premium billing to their utility companies, a move that critics say could help utilities offset any expected loss in revenue caused by lower energy usage.

Various surcharges might also reduce the cost savings to residential and commercial customers. In July 2007, the Kentucky Public Service Commission approved a pilot program to provide time-based rates. To defray some of the equipment cost, Kentucky PG&E will use an existing surcharge to recover program costs on top of an additional $5 monthly customer charge to program participants.

Similarly, a Congressional Research Service report in December 2007 cited requests from the Southern California Edison Company, the TXU Electric Delivery Company, and other public utility companies to recover the operation, maintenance, and capital expenditures costs associated with deploying smart grid technology. In each instance, the public utility commission granted the requests. The report says the federal government “will establish a program to reimburse 20 percent of the qualifying Smart Grid investments.” That means taxpayer dollars.

Other costs arise from the creation of new government positions and commissions to examine and address environmental issues. Raleigh created an environmental advisory board in June 2006 whose seven members will serve a two-year term. In a press release on the city’s website, the board is to advise the City Council, among other things, on the “desirability of abiding with the provisions of the Kyoto protocols to reduce emission of greenhouse gasses.”

In January 2008, the Raleigh City Council also proposed creating a full-time environmental programs manager position at an annual salary of $46,500.

Unintended consequences

Employing these advanced technologies may also have unintended consequences, as consumers are beginning to learn. Replacing incandescent bulbs with compact fluorescent bulbs (CFLs) are said to be safer, last longer, save more than $30 in electricity costs over their lifetime, and prevent greenhouse-gas emissions, according to the EPA.

Not only are few lamps and light fixtures designed for these CFLs, an additional cost for consumers, but, more important, CFLs poses environmental and health hazards. Each CFL contains 5 milligrams of mercury, a highly toxic heavy metal that the EPA warns can cause brain damage and learning disabilities.

The Energy Star Web site, a U.S. EPA and U.S. Department of Energy program, lists the steps for safe handling and disposal of a broken CFL. Consumers have to ventilate the room for 15 minutes and be careful not to use a vacuum cleaner or broom to clean up the fragments because cleanup spreads the mercury. Special disposal instructions are recommended for broken or used CFLs to prevent mercury contamination in the solid waste system.

The Metering.com Web site also urges caution in applying smart grid technologies, warning utilities of the danger of completely shutting off water to a customer because “water is needed to sustain life.”

“Utilities have a legal and moral responsibility to provide electricity 24 hours a day, seven days a week,” Hughes said. Utility companies have to weigh the consequences of shutting off certain appliances or reducing the utility load to a customer who is on a medical monitoring system or is using assistive devices.

Smart meter pilot programs are under way in North Carolina. Hughes said that Progress Energy Carolinas is “in the midst of a pilot program in 400 homes that will last for one year so they can evaluate the broader application of these smart devices.” As reported in the Charlotte Observer on Jan. 16, Duke Energy is also piloting a similar program.

“North Carolina will be the seventh largest state in the next two decades,” Hughes said, “and we must come up with a balanced plan to provide the state’s energy needs.” Despite the energy efficiency of new homes, Hughes said that “homes today use 50 percent more energy because of lifestyles and larger homes, as compared to the 1970s.” Progress Energy is using alternative and renewable sources of energy in conjunction with fossil fuels, but there are “pros and cons to every form of electric generation” and the company has to “pursue them aggressively and responsibly. There is no one solution,” Hughes said.

Hughes said discussions on energy management “tend to be emotional instead of rational and intellectual, and there’s a lack of long-term planning. Interest groups are always going to promote their views.”

When asked whether Progress Energy has any discussions or lobbying efforts under way to advance a legislative solution, Hughes said he knows of no program or mandate to force citizens to use smart grid technology. “Participation is strictly voluntary,” Hughes said, adding that ethical issues in managing energy through smart technology must be considered.

Ed Buchan, a water conservation specialist with the City of Raleigh Public Utilities Department, said the department is installing smart meters, but they only enable remote meter reading. Buchan said he knows of no current plan or discussion among city leaders to use advanced metering infrastructure that could remotely shut off or restrict water flow to individual homes or businesses. Raleigh’s smart meters will help detect water leaks, provide data on water usage, and reduce manpower by eliminating meter readers. “These measures will cut costs,” Buchan said.

When asked why municipalities do not take advantage of droughts to dredge lakes and reservoirs to hold more water, Buchan replied that environmental permitting and other regulations adds years to the approval process. “It takes a minimum of about 15 years to gain approval,” Buchan said. By the time projects gain approval, the costs have escalated and there are additional regulatory hurdles to cross while the project is under way, Buchan said.

Karen McMahan is a contributing editor of Carolina Journal.