4. Going Deep: Understanding the Big Picture and Real Costs and Concerns Helpful News Reports and Consumer Advocacy Reports and Analysis Read these recent articles taking a critical look at wireless smart meters and informing you on why you should not allow a smart meter installed on your home unless you're willing to accept the consequences. These articles paint an even bigger picture of what's going on here. Who really stands to benefit and profit? Is the wool being pulled over our eyes? Are we being sold a false bill of goods? Wall
Street Journal: "Smart Meter, Dumb Idea? New devices promise to cut
energy use by giving consumers more information. Critics say they aren't
worth the cost," by Rebecca Smith, Apr. 27, 2009: http://online.wsj.com/article/SB124050416142448555.html Forbes:
"Smart Meters: Not So Sharp For Consumers: Until pricing schemes
change, utilities stand to benefit greatly from smart meters--at the
expense of customers," by Andy Stone, Oct. 21, 2009: http://www.forbes.com/2009/10/21/smart-grid-utilities-business-energy-meters.html. New York Times & Greenwire: “Questioning the ‘Smart’ in Smart Meters,” by Tom Zeller, Jr., November 13, 2010: http://green.blogs.nytimes.com/2010/11/13/questioning-the-smart-in-smart-meters/ TIME: "Rage Against the Machine," by Tom McNichol, January 10, 2011, http://www.time.com/time/magazine/article/0,9171,2040176,00.html Pike Research: "Wireless Smart Meters Face Continued Obstacles in California," January 13, 2011, http://www.pikeresearch.com/blog/articles/wireless-smart-meters-face-continued-obstacles-in-california Bakersfield Californian: "Energy savings can be achieved without PG&E's disastrous SmartMeter devices," by Marcel Hawiger, TURN Staff Attorney, September 21, 2009, http://www.bakersfield.com/opinion/forum/x746310695/Energy-savings-can-be-achieved-without-PG-Es-disastrous-SmartMeter-devices NY Times: "New Meters Stir Fears for Health and Home," by Felicity Barringer, January 30, 2010: http://www.nytimes.com/2011/01/31/science/earth/31meters.html?src=twrhp Los Angeles Times: "'Smart meters' may soon be outdated," by David Lazarus, April 20, 2008: http://www.latimes.com/business/custom/yourmoney/la-fi-lazarus20apr20,0,7194397.column So what are the real costs? DOE has awarded $3.5 billion in smart grid
technology grants, with a combined total of $8.1 billion thanks to $4.7 billion
that the private industry is contributing in matching funds. But that is just a fraction of $1.5 to $2 trillion that experts estimate it will cost to upgrade everything. Who is going to pay for all of that? For more on the costs, read "Transforming America’s Power Industry: The Investment Challenge 2010-2030," November 2008, by the Brattle Group for the Edison Foundation. Read the Executive Summary at: http://www.edisonfoundation.net/Transforming_Americas_Power_Industry_Exec_Summary.pdf, or the full report at: http://www.edisonfoundation.net/iee/reports/Transforming_Americas_Power_Industry.pdf A big showcase of smart appliances is planned as the kick-off event for the much anticipated Consumer Electronics show in Las Vegas, January 6-9, 2011. Can you afford a $3,500 smart refrigerator? Who can afford these pricey "smart appliances"? How will middle and low-income consumers be able to afford to upgrade or purchase these smart appliances? Watch Wall Street Journal video: "CES: Beyond the Cool Factor of Smart Appliances," January 10, 2011: http://online.wsj.com/video/ces-beyond-the-cool-factor-of-smart-appliances/2D13938A-AF7A-42C1-8BF7-FDD321346672.html This article below reveals how those who will be gaining from this deployment of smart meters and appliances are the big corporations and utilities, not the consumer. Read: "First Smart Meters, now Smart Appliances," June 05, 2010, by Clay Maynard for the Appeal-Democrat: http://www.appeal-democrat.com/articles/smart-95720-appliances-energy.html Moreover, most wireless smart meters will come equipped with a wireless Home Area Network (HAN) interface that will communicate to your in-home energy monitor or display. In addition, the HAN will communicate wirelessly to your "smart" appliances, increasing your RF radiation exposure even further. Does your utility's wireless smart meter have a HAN? Is it active and communicating wirelessly upon installation? If not, when will it be activated? Is activation mandatory, or is it optional? Can consumers de-activate the wireless feature of the HAN or ask the utility company to de-activate it? Don't get us wrong. We believe in the importance of conserving energy and reducing energy costs. However, there are tools available right now that don't require the adoption of wireless smart meters and their associated wireless devices and "smart" appliances to accomplish this. (For instance, there's the Kill-A-Watt, http://www.p3international.com/products/special/p4400/p4400-ce.html. Consumer advocate Mindy Spatt of The Utility Reform Network told the public at the SoCal Smart Meter Forum on November 10, 2011, in Glendale, CA, that clothespins and a power strip could be more effective and less costly at reducing energy use and costs than the costly smart meters. Read more on about TURN's take on smart meters below.) Several consumer groups and consumer advocate groups have informed the U.S. Department of Energy and President Barak Obama about their concerns and problems that the see in the adoption of certain smart grid technologies and rate schemes, particularly the problem with the Time-of-Use (TOU) rate scheme that will charge consumers more money for using energy during certain times of the day. On the California state level, there's The Utilities Reform Network (TURN), a consumer watchdog group that has very early on criticized mandatory smart meters. They point out that despite utilities telling us that smart meters will reduce energy costs, the truth is that costly smart meters don't save energy costs and electricity, they just track energy usage. The bulk of the costs of this smart meter program will fall on consumers. Read: "Smart Meters, A Dumb Idea": http://www.turn.org/article.php?id=875 "TURN Backgrounder: Smart Meters: A Dumb Idea with a High Pricetag," http://www.turn.org/article.php?id=292. Excerpt: Aren't there more effective ways of reducing peak demand?
TURN's variety of reasons (and articles) about why we should oppose them: http://www.turn.org/section.php?id=160 On the national level, there’s the National Association of State Utility Consumer Advocates (NASUCA), which has been joined by other citizen and consumers groups like the AARP, Public Citizen, Consumers Union and the National Consumer Law Center, and the National Community Action Foundation, recommend that smart meters should be voluntary. NASUCA, AARP, Public Citizen, Consumers Union and the National Consumer Law Center also issued the following recommendations and consumer protections:
These
groups, in addition with consumer advocate and former state utility
commissioner Nancy Brockway and consumer advocate Barbara Alexander, and
the California Division of Ratepayer Advocates, have issued serious
concerns about smart meters. These concerns include cost efficiency, and dangers regarding privacy and security, meter reader job loss, shutting off residents power remotely, the costs of smart meters become obsolete technology as soon as they are deployed, and the need to provide consumers with options. Particular concern is given to the proposed TOU rate schemes that smart grid proponents say are needed to make the smart grid technologies work. In contrast, consumer advocates say that TOU rate schemes could negatively impact our most vulnerable populations, including low-income and fixed income households, as well as those who require home energy usage 24/7, which include those on home medical support systems, stay-at-home parents or guardians, and small business owners who work out of their homes. In addition, consumer advocates worry that deaths and fires could result when power is shut off remotely (people have frozen to death as a result) or when consumers are forced to reduce their energy usage and use candles, fire, or other energy sources that are potentially hazardous in response. For more details on these concerns and the reports and documents issued by the consumer advocate parties mentioned above, read: 1. Public Citizen: "Energy Investment Forum, Building Green: Consumer Viewpoints on the Smart Grid," January 20, 2011, by Tyson Slocum, Director, Public Citizen’s Energy Program: http://www.citizen.org/documents/EnergyInvestmentForumPres.pdf See page 3, Overview of Problems: • Mandatory installation of smart meters into homes is premature – smart meters are being used in profoundly dumb ways • Optimizing smart meters requires seamless and automatic communication with “smart” appliances and heating/cooling systems - but working families (and renters) have little incentive or opportunity to afford such appliances • As a result, households are using the $200-$500 meters to respond to price signals manually – and the tiny loads used by most families won’t allow them to recover in energy savings the cost of the meter • Smart meter installations have thus far prioritized utility budget efficiency – not household budget efficiency. • Poring through utility dockets, utilities make it clear that the vast majority of projected savings from smart meters is from laying off utility workers – and not from consumers’ lowering their energy use and bills • Utilities highlight savings from remote disconnection – mainly for nonpayment. This raises serious consumer safety and health issues. 2. Read "AARP, National Consumer Law Center, and Public Citizen Comments to: DEPARTMENT OF ENERGY Smart Grid RFI: Addressing Policy and Logistical Challenges, November 1, 2010," written by David Certner Legislative Counsel and Legislative Policy Director, AARP Government Relations and Advocacy; Olivia Wein, Staff Attorney, National Consumer Law Center; Tyson Slocum, Director Public Citizen's Energy Program: http://energy.gov/sites/prod/files/oeprod/DocumentsandMedia/AARPNCLCPublic_CitizenCommentsDOE1101.pdf See Pages 4-6: ...past
experience with time of use rates cautions that initial interest in
such rates tapers over time. In addition, the low take-rate in the
PG&E service territory over the last two years does not bode well
for the popularity of critical peak pricing. ...Studies to date attempting to show that low-income customers will benefit do not demonstrate that such will be the case. ...Another major consumer concern that has yet to be addressed by smart metering proponents is the threat smart meters pose to consumer protections that have been developed over the last 30 years. Smart meters have been touted by industry proponents as offering the benefit of remote disconnection. From a consumer perspective, this is not a benefit but rather an erosion of fundamental consumer rights. Residential customers who are remotely disconnected without a last chance to make payment arrangements, or who shut themselves off with no utility contact (when their prepayment card runs out of funds) are at great risk in terms of health and safety. A recent investigative news report from Texas (where deregulated electricity commodity vendors can offer service on a pre-paid only basis) tells of vulnerable pre-payment electricity customers being cut off without notice. Families with children have had to abandon their homes. A paraplegic who requires air conditioning to maintain a safe body temperature lost his electricity on days when the temperature exceeded 100 degrees. A heart failure patient who needed power for an oxygen machine was cut off twice by her pre-payment meter in one summer. The risks of disconnection by remote control or by automatic action of a pre-payment meter or service limiter are also shown in the case of a 90-year old Michigan man who froze to death in his own kitchen last winter. When he was found, there were funds to pay for his bill on the table. But he had missed a payment and the utility had installed a service limiter. When the service limiter tripped, the gentleman could not or did not know how to reset the limiter. Customers whose utilities are disconnected have died from hypothermia, from fires set by candles used for lighting in the absence of electricity, and from other consequences of loss of power. The concern of consumer advocates over the dangers of involuntary remote controls on household usage cannot be overstated. The failure to address and resolve questions about the benefits of smart metering and dynamic pricing versus the risks noted by consumer advocates has led such organizations to view smart metering propositions with mistrust. ...To get consumers on board, so to speak, it will be necessary to undo the impacts of the top-down approach of the last several years. To do this, policy makers must consult with consumer advocates, and not only attempt to address their concerns, but work directly with the consumer community in identifying concerns and developing policy responses. For example, it would be helpful to bring into the National Collaborative on Demand Response not one, but several representatives of various groups of customers. See Pages 10-11 Conclusion The policy solutions developed concerning the issues raised in this RFI will have a profound impact on residential consumers, and low-income and fixed-income seniors in particular. It is unfortunate that many continue to inappropriately lump smart grid and smart meters together in a way that fails to address the consumer protections that are necessary in a transition to smart meters. As outlined in the attached paper, the adoption of smart meters should be carefully examined and considered in light of key concerns and, where implemented, should be accompanied by several essential consumer protections. 3. NASUCA “Reply Comments Regarding the Implementation of the National Broadband Plan by Empowering Consumers and the Smart Grid: Data Access, Third Party Use and Privacy,” August 9, 2010: http://www.nasuca.org/archive/Reply%20Comments-Implementation%20of%20the%20National%20Broadband%20Plan-8-9-10.pdf See Page 2 ...consumers should have the choice to participate in any advanced metering program or in any dynamic pricing schedule that may involve data sharing arrangements. 4. AARP "Reply Comments to: DEPARTMENT OF ENERGY Implementing the National Broadband Plan by Empowering Consumers and the Smart Grid: Data Access, Third Party Use, and Privacy," by David Certner, Legislative Counsel and Legislative Policy Director, AARP Government Relations and Advocacy, August 6, 2010, http://energy.gov/sites/prod/files/gcprod/documents/AARP_DataAccess.pdf. See Page 6-8: Five kinds of privacy concerns are raised by implementation of a smart metering system. These include identity theft, personal surveillance, energy use surveillance, physical danger, and misuse of data. In its recent draft interagency report on smart grid cyber-security, NIST has summarized these as "potential surveillance possibilities posing physical, financial and reputational risks." ...With smart metering, the consumer has no choice but to buy electricity, and no choice but to buy it through the utility, whose smart metering and data collection pose the risk of a breach of their privacy. The customer will not be able to opt out of the collection of such data, nor of its communication over the utility's communication networks. ...Consumer outcry over the impact of new meters and pricing plans in California and Texas underscores our concern that the roll-out of new technology has sped ahead of the necessary development of consumer protection policies. Indeed, as evidenced by recent industry meetings, utilities and smart meter vendors have begun to realize that they have left the consumer out of the equation in smart meter deployment and are playing catch up. State regulators are now beginning to consider consumer protection and privacy concerns as part of their review and approval of smart meter deployment. 5. NASUCA-AARP-Public Citizen-Consumers Union-National Consumer Law Center, “White Paper: The Need for Essential Consumer Protections Smart Metering Proposals and the Move to Time Based Pricing,” August 2010: http://www.nasuca.org/archive/White%20Paper-Final.pdf 6. Consumers Union, National Consumer Law Center, and Public Citizen, "Public Comments in Response to DOE RFI Concerning Data Access and Privacy,"letter dated July 12, 2010, http://www.doe.gov/gc/downloads/re-comments-nbp-rfi-data-access. Read excerpts: On Pages 4-5: III. Delivering Consumer Benefits All stakeholders agree that consumer choice and education are key components of a successful program. However, mere lip service to these ideas is not enough—in order to truly deliver consumer choice and education on smart meters, there are several steps needed to turn this into a reality. A. Basic Principles: Consumer choice. Wherever possible, smart meter and time-of-use pricing, especially for low-volume users, should be voluntary. If smart meters are made attractive to consumers, they will choose to participate in smart meter programs. In Idaho, for example, voluntary installation of smart meters resulted in more than 50% of customers opting in. Even if a new program is opt-out, voluntariness makes smart meters more appealing and protects those consumers for whom the smart meter is not a cost-effective or beneficial option. On Page 8: IV. Key Questions Regulators Should Ask Prior to Smart Meter Approval 4. Consumer Choice a. What choices are being provided to people? 7. NASUCA, "Public Comments to DOE in Response to RFI Concerning Data Access and Privacy," July 12, 2010, http://energy.gov/gc/downloads/comments-national-association-state-utility-consumer-advocates. 8. "Advanced Metering Infrastructure: A Snapshot of
Smart Metering in North America,. Mid-2010," by Nancy Brockway, Principal,
NBrockway & Associates, Boston, MA, June 2010; updated July 2010, http://www.nbrockway.com/documents/Brockway-Snapshot_July-16.pdf. (If the document or website is inaccessible, then scroll down to bottom of this screen to view the document.) Page 42 In both the PG&E case and the Oncor case, utility stumbles in the introduction of smart metering led to customer mistrust of the new technology. The smart metering and dynamic pricing industry has begun to recognize that consumers generally are not welcoming the new metering system and pricing options. Consumers definitely are not demanding that utilities install the new technology or offer dynamic pricing. Consumer advocates have been almost universally cool to the new meters and pricing options. The industry has begun to realize that it has a customer acceptance problem. Pages 44-45 On the other hand, the uncertainties that counseled caution three years ago remain unresolved. We cannot know how many customers of what types will take up (or stay on) which dynamic prices upon full deployment. We cannot be sure what demand response they will make to dynamic prices. We are not sure to what extent, if any, customers will adopt feedback devices, or use them to guide consumption reductions. Perhaps most importantly, we do not and cannot yet know the extent to which demand and usage reductions in the early years of a dynamic pricing offering will persist reliably into the future. At the same time, we have not established the standards and protocols necessary to build out the smart grid and install smart metering on a wide scale. We continue to learn about cyber-security risks and risks to consumer privacy. Consumer protections must be fashioned to fit the new technology and preserve customer access to affordable and efficient power. Industry players continue to debate details of open standards versus proprietary solutions. No approach has achieved dominance, and there is as yet no sign of path dependence or other factors forcing a convergence around a few marketable technologies. Customer acceptance of the new prices and technologies has been set back by botched roll-outs in California and Texas. Smart metering proponents have begun to realize that they do not understand their prospective customers enough to develop the industry in ways that will attract customers. The smart metering market does not yet have the buzz of excitement that a new technology often has, when early adopters are willing to pay premium prices to be the first on their block to have the latest gadget, with the mass market developing from there. Tension continues to exist between the impulse of government and the industry to "build it and they will come" and the drive to answer the question "what does the customer want?" 9. On June 29-30, 2010, the Cooperative Research Network (CRN) Summit in New Orleans,
Louisiana, examined a wide variety of Smart Grid technologies from the
cooperative perspective, asking which are ready for prime time and what value
consumer members may gain from their adoption. The CRN Summit brought together
co-op early adopters along with experts from across the industry to share
experiences, lessons learned and the latest developments on Smart Grid
technologies.
Watch video of Dave Ashukian's interview -- Mr.
Ashuckian is Deputy Director of the Division of Ratepayer Advocates for the
CPUC, and he addresses the problems re: Time of Use Rate program and behavioral
changes required by industrial and residential consumers to make smart meters
succeed, and the Peak Time Rebate rate program that DRA advocates, PG&E's
expensive $1/2-billion mistakes in making wrong technology decisions, etc.
10. NASUCA-Public Citizen-Consumers Union-NCLC-NCAF “Joint Letter to President Obama on Smart Meters,” May 10, 2010: http://www.nasuca.org/archive/Obama%20Letter%205-20-10.doc See Page 2: Moreover, advanced meters and the pricing options associated with such technology must be offered on a voluntary basis
and must be accompanied by considerable customer education. If
customers are suddenly put on price-responsive tariffs without
understanding them, the consequences to these customers could be
economically dramatic, particularly for low-income senior citizens on
fixed incomes. Further, such dramatic consequences could result in
customer rejection of the concept. Customers
who are offered these rate designs must understand how they work so
that they can take advantage of pricing design options. 11. "SMART METERS, REAL TIME PRICING, AND DEMAND RESPONSE PROGRAMS: IMPLICATIONS FOR LOW INCOME ELECTRIC CUSTOMERS, May 30, 2007, by Barbara Alexander, Consumer Affairs Consultant, http://sedc-coalition.eu/wp-content/uploads/2011/06/Alexander-07-02-01-Smart-Meters-and-Low-Income-Customers.pdf. (If the document or website is inaccessible, then scroll down to bottom of this screen to view the document.) Page 21: While state
regulators and nonregulated (electric cooperatives or publicly owned)
electric utilities are not required to offer all customer classes the
option of these new meters and alternative electric pricing
methods, the fact that states are required to conduct an analysis of
these options means that the proponents of this new federal policy will
be eager to participate in state proceedings and argue for these
policies and programs. Whether representatives of residential customers
generally or limited income and payment troubled customers will be at
the table is a legitimate concern. Also read Barbara Alexander's July 15, 2010, presentation "SMART REGULATORY APPROACH FOR SMART GRID INVESTMENTS," for the 2010 National Energy and Utility Affordability Conference (NEUC) : http://www.energyandutilityconference.org/Assets/2010%20Conference/2010%20Presentations/Plenary%201_Alexander.pdf. (If document or website is inaccessible, then scroll down to bottom of this screen to view the document.) Among her points:
Consumer groups believe wireless smart meters to monitor our natural gas consumption, in particular, is unnecessary. Read stories below, including how the CPUC’s own Division of Ratepayer Advocates (its independent consumer branch) criticizes the need and costs for SoCalGas' $1 billion rollout of wireless smart meters, in which consumers end up being the losers: Division of Ratepayer Advocates, “DRA Says Approval of SoCalGas Smart Meters Will Increase Rates, Lead to Job Losses,” Apriil 8, 2010: http://www.dra.ca.gov/DRA/News/News+Releases/100408_scg.htm TURN – The Utility Reform Network, “So CalGas: The Dumbest Smart Meters Yet,” March 10, 2010: http://www.turn.org/article.php?id=1115 Los Angeles Times: “SoCalGas gets OK for $1-billion smart-meter project: The California Public Utilities Commission votes 3 to 2 to let the firm bill customers to install the radio-controlled devices on 6 million homes. Critics say it's a money loser,” April 8, 2010: http://articles.latimes.com/2010/apr/08/business/la-fi-gas-meters9-2010apr09 For the latest development on this front (November 2011), the independent consumer
branch of the CPUC, called the Division or Ratepayer Advocates (or DRA), and
TURN are asking the CPUC to overturn the approval of the So Cal Gas Smart
Meters. Read Los Angeles Times, "Consumer advocates call SoCalGas 'smart' meters too costly," November 16, 2011: http://latimesblogs.latimes.com/money_co/2011/11/consumer-advocates-call-socalgas-smart-meters-too-costly.html ===================================================== DISCUSSION
OF MAIN CONCERNS: Read these and helpful information about the wireless
smart meter issue -- click each of the discussion items below. 1. First and Foremost: Are Wireless Meters Mandatory? 2. Smart Meters Unite Consumers, Citizens and Residents from Opposite Backgrounds and Political Affiliations 3. Actions Being Taken: What Are Consumers Doing To Protect Their Civil Liberties and Affirm Their Rights to Refuse or Opt Out? 4. Going Deep: Understanding the Big Picture and Real Costs and Concerns, Helpful News Reports and Consumer Advocacy Reports and Analysis 5. Smart Meter Consumers Anger Grows Over Higher Utility Bills 6. Privacy and Security Concerns Still Unresolved 7. Health Concerns Grow: Consumers Are Getting Sick From Wireless Smart Meters 8. Consumers Report Public Safety Hazards and Interference Problems |
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