With surging electrical rates and increase demand the smart grid has been gaining traction as a way to allow consumer to control their usage and smooth out peak demand. In the future policies will require the reduction of CO2 emissions from power plants and one way to achieve this is by lowering the demand put on them. The smart gird is considered by many as a partial solution to this, but not everyone is happy about it.
The cost to install smart meters in households and ensure that the infrastructure is in place to operate them is enormous and most utilities pass that cost onto the consumer. Because of this some consumers have actually seen their bills increase rather than decrease. The Wall Street Journal recently put out an article entitled “Smart Meter, Dumb Idea?” http://online.wsj.com/article/SB124050416142448555.html which outlines some of these costs to the consumer. In addition to the infrastructure utilities are spending millions of dollars to educate the consumer on how to use the device, and of course, these costs are also passed through.
These additional costs are causing a backlash amongst consumers. In California and Texas utilities are putting together focus groups to address the negativity seen in the marketplace. http://blogs.kqed.org/climatewatch/2010/03/10/the-backlash-against-smartmeters/ Some Texas consumers have gotten so upset that they’ve formed a group called Smart UR Citizens http://www.smarturcitizens.com/ in order to get their voices heard and fight these charges being passed onto them.
Energy, Technology, & Policy 
The phrase “you get what you measure” is applicable to the smart meter issue. Most consumers know little of the energy consumption of their home devices and the impact that this consumption has on their electricity bills and lives in general, other than knowing that a 1000W microwave oven heats up soup faster than a 800W model. Understanding the ramifications of excessively using electricity in peak pricing hours, or leaving on devices when out of the house may indeed be useful to consumers. However, the current price of smart meters does not compare favorably with the energy savings resulting from their use. With the current price of electricity in the three to six cents per kW hour range, a smart meter would have to save thousands of kW a year to justify its typical price tag of $400. Moreover, those who are more likely to purchase smart meters are probably already ‘energy-savvy’ i.e. be aware of their energy footprint and proactively incorporate energy-saving measures into their homes. In this sense, the devices are “preaching to the converted”.
A further concern about smart meters is the potential for rogue users to hack the devices and alter the information that they send to the utility company, or worse, remotely turn devices on and off without the users consent. An article in the March 27th edition of the Austin-American Statesman discusses these concerns and interviews Joshua Wright, a senior security analyst with InGuardians. Joshua has found security vulnerabilities in products currently being rolled out by meter manufacturers, although admits that there is little evidence to suggest that homes already with these meters have been hacked.
Source: “Smart meters may put grids at the mercy of hackers”, Austin American Statesman, Section B8, 03/27/10.
There have been many documented accounts of customer backlash regarding smart metering and in-home energy management devices. One of the main reasons for this is because the “real-time management devices” are not usually included in the initial smart meter package. Most likely, many consumers just assume that a smart-meter will automatically lower one’s electric utility bill without any changes to their electric consumption habits, which obviously emphasizes the importance of consumer education regarding the matter.
One report states, “Utilities must avoid waiting too long between installing smart meters and in-home energy management consoles. There’s a real risk here that the lag between the smart meter going in…and the in-home network that provides value to the consumer is so great that the consumer starts to feel disenfranchised…” [1].
On the other hand, I worked for an electric utility this past summer and the benefits the utility would gain from smart meters seems to be very substantial. For example, smart meters and an integrated energy network would eliminate the need for “meter readers,” which would allow the utilities to cut substantial costs. Also, as addressed in the original blog post, the smart meters would allow utilities to simply shut off power supply to customers that don’t pay their bills. Although, some people see this as too much control from the utility, this feature would simplify the process of terminating, transferring, and activating customer accounts.
I believe that the use of smart meters will eventually bring long term benefit for both customers and their energy providers, however there are obviously still some kinks to be worked out before everyone is happy.
[1] http://www.smartmeters.com/the-news/690-pgae-smart-meter-problem-a-pr-nightmare.html