Juicing down for global warming

More electric utilities need to install 'smart' meters that show real-time costs and reduce power demand.

from the July 26, 2007 edition

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Even if smart meters cut usage by only 5 percent nationwide with "time-of-day" pricing, that would save about 625 combustion turbines from being built and reduce overall industry costs by about $3 billion a year, according to a study by The Brattle Group, a consulting firm.

But such savings won't come cheap.

The cost of installing what's called advanced metering infrastructure (AMI) – with new meters alone priced up to $200 – may take years for utilities to recover. Many in the industry are balking at the up-front price tag, the technical challenges, and the uncertainty of consumer reaction to volatile prices and in-your-face meters.

Sensing resistance, Congress nudged utilities to adapt AMI in its 2005 energy law. Several states, especially California, are pushing it hard. At present, though, AMI is used in only about 6 percent of meters. State regulators need to be more aggressive in forcing utilities to give up the old practice of selling as much electricity as possible with flat-rate pricing and meters that consumers don't understand (and can't easily see). One idea is to "de-couple" a utility's profit from its electricity sales by guaranteeing a set rate of return.

Electricity providers need to become facilitators for their customers in achieving energy efficiency and reducing their carbon footprint.

Being "smart" isn't only for meters that alter electricity usage.

It's for the planet, too.

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