The future is here: smart metering in CA

Announcements of smart meter roll-outs across California abound recently. A new study of 300 homes and businesses in California’s desert interior will take smart metering an extra step by helping consumers to use both electricity and water at off-peak hours:

Coachella Valley Water District (CVWD) is partnering with the Association of California Water Agencies (ACWA) and Energy Consulting to conduct the study, which is funded predominately through a $400,000 grant from the California Energy Commission. Energy use associated with water is substantial. Statewide, energy directly associated with water deliveries accounts for eight percent of all energy consumption. Factor in the amount of energy needed for wastewater disposal, water heating and cooling, and the percentage jumps to a fifth of total energy consumption in California. The 18-month, time-of-use study will begin this month and continue through fall 2009. Where possible, homes and businesses with water meters featuring automated reading already installed will be utilized. As needed, additional “smart” meters will be installed to ensure that the study is sufficient in scope. These meters provide a reading that is entered into the database of a computer automatically. Data from the meters enable the customer to determine at exactly what time and how much water is consumed and, quite often, for what purpose.

Sempra Energy will begin their roll-out of smart meters this month, with plans to replace an estimated 1.4 million electric meters with smart meters by 2011 at a cost of $572 million. Southern California Edison will complete replacement of 5.3 million conventional meters under their SmartConnect initiative by 2012. Many Pacific Gas and Electric customers will see replacements this summer, with all 10.3 million meters in the PG&E service area replaced by 2011. Back in January there was a flap about whether or not state regulators would have the authority to make mandatory thermostat adjustments in the rare event of state electrical emergencies. At the time, Lynne Kiesling aptly weighed the concerns and opportunities for two-way communicating programmable utility meters over at Knowledge Problem. Some ratepayer advocates are still balking at the $200 to $450 per-meter costs of the upgrade, but that is nothing compared to the costs of employing troops of meter readers and service people, having a major commodity without any price signal at the point-of-purchase, and building additional peaker power plants. Worse, many of these critics make the rather unflattering assumption that consumers are too stupid to use smart meters. We’ll see about that!

Skaidra Smith-Heisters is a policy analyst at Reason Foundation, a nonprofit think tank advancing free minds and free markets.