Enthusiasm Declines Over "Smart" Meters Program

Seven years after legislators passed a law encouraging the use of “smart” electricity meters across Texas, enthusiasm about the initiative is waning amid complaints about the meters being installed against the wishes of some homeowners. And the numbers of calls are increasing from Texans who want to opt out of the program.

Smart meters, which can be remotely read, record power-usage data almost instantly, enabling utilities to respond faster to outages and also helping consumers track their own electricity habits and save money.

Utilities have placed the meters in millions of Texas households, and their proponents say they make the power system more efficient.

But some Texans say that the program, which is essentially mandated by the Public Utility Commission, should be optional, and legislators are listening.

“I think anything resulting in voluntary energy efficiency is beneficial, but this particular program has gone a little overboard,” state Sen. John Carona, R-Dallas, said in an email. Carona, who chairs the Senate Business and Commerce Committee, plans to push for legislation that would create an opt-out option. But PUC regulators, who are also considering the issue, could act first.

More than 90 percent of the meters in the deregulated Texas power market, which covers most of the state, now have “smart” capabilities, according to the PUC. The meters have replaced analog meters that could be read manually each month.

The cost of the smart-meter project is around $2.5 billion so far, financed by years of charges ($2 or $3 per month) on most Texans’ power bills.

Smart meters allow Texans to switch power providers quickly, said Trip Doggett, chief executive of the Electric Reliability Council of Texas, which operates the state grid.

They cut the need for meter readers and allow utilities to pinpoint outages more quickly. Since the spring, Oncor, a Dallas-based utility, has responded to more than 2,500 outages without customers even reporting the problem, according to Catherine Cuellar, a spokeswoman for the utility. Oncor has also slashed its cost to connect service to $3.20 from about $15 under the old meters, according to the PUC.

However, “for some people, the benefit does not match the cost,” said Tim Morstad, a Texas  official with AARP, which represents people 50 and older. For example, he said, retail power providers (which are different from utilities like Oncor) have been charging more for connection and disconnection services, reducing any benefits for ratepayers.

Some Texans have complained about health risks from radio frequency signals, a key reason resistance to meter installation has grown. The PUC says that the exposure is less than for a microwave.

The energy-saving changes envisioned with “smart grid” technology, such as prices that are lower in the early morning and higher in the afternoon to encourage Texans to reduce strains on the grid, mostly have not happened. A few programs exist. For example, Reliant Energy, based in Houston, offers a plan that features a discounted rate for power use on nights and weekends. Bill Harmon, a vice president of the company, says that “tens of thousands” of customers have signed up. Other Reliant plans feature a weekly email summary of power use.

But persuading people to use less power — a key goal of smart meters and broader smart grid projects — goes against long-established power-use incentives, said Karl Rábago, a former Austin Energy official who now runs his own consulting firm. Power companies, he said, make money by selling electricity. So the more they sell, potentially the more money they make.

It is also tough to change consumers’ behavior, Rábago said, “after a century of telling them not to think about their own electricity.”

Frank Wolak, an economics professor at Stanford University, said the difficulties were not confined to Texas, which is in fact making more use of the smart meters than California, another state that has aggressively added the technology. The structure of retail market regulation in all states, he said, made it “unlikely” that power rates that change depending on the time of day can take off in the United States.

Nonetheless, Doggett, the ERCOT chief executive, said that the meters will be a “great tool” for expanding demand-response programs in the state, which incentivize Texans to use less power during summer afternoons. The meters will help measure and verify Texans’ participation in the program. And smart grid advocates insist that more possibilities are coming.

“It’s almost like the early days of dial-up modems in the Internet,” said Brewster McCracken, chief executive of Pecan Street, an Austin smart-grid project.