PUCT Moves Closer To Smart Meter Opt-Out

In December, the Texas Public Utilities Commission (PUC) approved the creation and distribution of opt-out rules for electric consumers who oppose smart meter installations [1].  The rules will go back for a final vote, but unfortunately it appears the PUC is moving in this direction and is not the first state to do so.  As of spring 2012 Maine, Oregon, California, Nevada, Michigan, Vermont and Arizona were also introducing opt-out programs [2].

I support utilities fighting the opt-out clause for several reasons.  Most importantly, forcing utility companies to retain use of old utility meters takes away from the societal benefits widespread smart meter deployment can provide.  In terms of outage management, increased reliability, reduced congestion, and reduced peak demand that could lead to reduced energy prices and a reduced need for new peak power plants, smart meters are an important building block of the broader grid modernization effort.

Additionally, reading some customer meters on a monthly basis drives utility companies to retain additional utility vehicles and meter readers, and maintain two accounting systems, one for manually read data and one for the automated smart meter data.  The cost of this effort depends on the alternative the utility chooses between installing an analog or digital meter, leaving the smart meter with the radio turned off, or changing the point of delivery, and includes the upfront costs of making these changes and the monthly cost of reading the meter.  Hopefully the PUC will at a minimum decide this cost will be passed to the customer who decides to opt-out so that utility funds can be used to progress further into other smart grid technology.

One of two traditional arguments against smart meters is the health concerns of the radio frequencies emitted by the meters.  The PUC has tried to communicate that meters are within the Federal Communications Commission’s standards for radio frequency devices.  As shown in Figure 1 below, not only is RF exposure from smart meters less than RF exposure from a mobile phone, it is less than natural RF exposure from other humans and the planet [2].  Certainly health reasons alone lack justification for the missed opportunities of the new smart meter infrastructure.

Comparison of RF Exposure Sources to Smart Meters

Figure 1. Comparison of RF Exposure Sources to Smart Meters [2]

The second traditional argument with respect to privacy concerns is stronger, however, the Texas Public Utility Regulatory Act (PURA) mandates the following, “All meter data, including all data generated, provided, or otherwise made available, by advanced meters and meter information networks, shall belong to a customer, including data used to calculate charges for service, historical load data, and any other proprietary customer information.”  Furthermore, the PUC has given the customer power to authorize its data release to retail electric providers [3].

The second part of the privacy concern applies to cyber security.  Fortunately, the first version of the National Institute of Standards and Technology (NIST) and the Federal Energy Regulatory Commission (FERC) smart grid guidelines and standards has been released [4].  Monitoring adherence to these guidelines is difficult, however, utilities have strong incentive to ensure the security of their new computerized systems and protect their investment.  Thus for me, promoting improvements in security is better accomplished by supporting utilities in their efforts to create a smarter grid rather than obstructing them with opt-out rules.

For those that share my opinion, there may fortunately be a legal strategy for utilities to prevent the new opt-out clause.  In a feasibility study conducted by Oncor at the request of the Commission, it was identified that “Texas law does not allow a regulatory agency to amend or rescind a final, non-appealable order,” which could apply to the original non-appealable Commission order that approved meter deployment to all customers in their service area  [5].

[1] The Dallas Morning News. “Public Utility Commission approves writing rules for Texas smart meter opt-out.” http://www.dallasnews.com/business/headlines/20121214-public-utility-commission-approves-writing-rules-for-texas-smart-meter-opt-out.ece

[2] Black & Veatch. “The Opt-Out Challenge.” March/April 2012. Electric Light & Power. http://bv.com/docs/articles/the-opt-out-challenge.pdf

[3] Public Utility Regulatory Act, Title II Texas Utilities Code. September 01, 2011. pg 121. http://www.puc.texas.gov/agency/rulesnlaws/statutes/Pura11.pdf

[4] U.S. Government Accountability Office. “Electricity Grid Modernization, Progress Being Made on Cybersecurity Guidelines, but Key Challenges Remain to be Addressed.” January 2011. GAO-11-117.

[5] Public Utility Commission Interchange.  “PUC Proceedings to Evaluate the Feasibility of Instituting a Smart Meter Opt-out Program.” 40190-326. http://interchange.puc.state.tx.us/WebApp/Interchange/Documents/40190_326_728872.PDF



Filed under energy

5 responses to “PUCT Moves Closer To Smart Meter Opt-Out

  1. Great post! The fact that we continue to purchase power blindly is baffling considering the technology we have available today. I agree with you in regards to the social benefits that smart metering can provide. I believe even if the cost of installing a smart meter is passed on to the consumer, the consumer will benefit financially. For example, take the 5 Tier Base Electric Rate structure practiced by Austin Energy[1]. In this arrangement, consumers pay higher rates as they consume more energy for the billing period. Unfortunately, consumers are unaware of the rate they’re paying at any given moment due to the lack of knowledge in regards to the amount of power they’ve consumed thus far. This is a significant issue considering that rates vary from 1.8 cents/kWh for the first 500 kWh consumed in the fall, spring, and winter months to 11.4 cents/kWh for power consumed above 2,500 kWh in the summer. That’s nearly a 10-fold increase! Additionally, rate hikes have recently been proposed by Austin Energy and are under review. With the incorporation of smart meters, consumers can monitor their use of electricity much more diligently and make wiser power consumption decisions in order to save money.


  2. Correction on my previous post – the increase between the two rates is not 10-fold but is very significant.

  3. I think there are legitimate fears that need to be addressed with smart metering. There will be continued opposition until we face them. One stems from privacy and the other from trust.

    First privacy: In general, US citizens like to do what they want without interference from others. While time-of-use reporting does not substantially reduce the privacy of a person’s power consumption, there is a real fear that this information could somehow be used against consumers. As you can tell, I think this argument is fairly weak and fears can be assuaged by alerting people to the limited difference between the information they already provide and what they would provide through smart metering. You could also reduce concerns by pointing out this method actually limits the need for power company reps to visit your land. No more meter reading means perhaps greater privacy than they currently enjoy.

    The second and greater challenge in my mind is that of trust. Everyone collects consumer data. It is a commodity to be bought and sold. In general people are not aware of how much information is already collected about them. Credit card transactions, shoppers club cards, even page views are tracked and distilled for valuable consumer behavior trends. While all of these programs are either invisible to most consumers or provide tangible benefit, most do not see how smart meters benefit them individually. Locally, Bluebonnet Electric Cooperative has implemented a smart grid program that actually allows them to adjust the consumption of residents through remote thermostat adjustment and other methods. This is clearly more invasive than what smart meters provide, but in general has been successful at reducing BEC’s power demands as well as resident’s bills. This has made it relatively successful. If we can clearly demonstrate how smart meters would reduce individual bills and not just refer to some macro-benefit, I think the trust issue would be somewhat allayed by the interest in direct customer savings.

    Source: http://www.bluebonnetelectric.coop/myCooperative/sustainableGrid/sustainableGrid_chapter3.aspx

  4. Your discussion about the interaction between smart meters and personal security made me curious: what are some uses of the data, and who might try to get it?

    It turns out that illegal drug growing operations can be busted by monitoring abnormal electricity and sometimes water usage at the meters. These individuals try to circumvent the current system of electric meter readings by stealing electricity from other lines, but a neighborhood-wide smart meter system will allow for such theft to be much more easily discovered and monitored [1]. Of course, law enforcement seeks subpoenas to have access to this type of data [2].

    So, I believe that this shows that there will exist incentive for the data to be sometimes placed under surveillance — hence the privacy concerns for law abiding citizens.

    [1] http://articles.baltimoresun.com/2010-10-11/business/bs-mob-hancock-marijuana-20101011_1_smart-meters-smart-meter-digital-meters

    [2] http://www.dispatch.com/content/stories/local/2011/02/28/police-suspecting-home-pot-growing-get-power-use-data.html

  5. ericz

    Your post does a good job of exposing the seemingly baseless concerns over exposure to radio frequency waves, which the FCC has said is substantially below the protective limits set for the general public. However, I think some privacy concerns still exist, and it makes sense to address those through consumer choice. Although opt-outs by individual consumers would place an additional burden on utility companies and reduce the benefits of a comprehensive smart grid, I think the option is still important as a matter of consumer choice and privacy, regardless of the rather weak arguments regarding privacy concerns. Even online privacy agreements allow users to opt-out by choosing not to use a particular service, which is not a feasible option in terms of residential energy use.

    A more effective option would be to engage in a transparent dialog with customers and establish comprehensive protection of all data collected rather than mandating usage, which would ideally prevent opt-outs for privacy related concerns. The total number of opt-outs would be very low, as seen in Maine—a state that allows users to opt-out of smart meter installation while also having the highest penetration rate in the United States. http://news.nationalgeographic.com/news/energy/2012/12/121212-smart-meter-privacy/

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