People currently debate the benefits and costs of smart meters. On the one hand, they allow automatic reporting, time-of-use pricing, and usage statistics to customers. This allows utilities to reduce costs (no more meter readers), manage generation more efficiently, charge customers more fairly, and give customers the feedback they need to adjust their consumption behavior. On the other hand, there are concerns over privacy, potential hacking/security risks associated wireless data transfer, skepticism regarding savings, and even health fears. To me, there are a lot of concerns here, but I want to address the one that seems the most prevalent in the United States and Texas specifically: privacy.
In the current legislative session, Sen. John Carona, R-Dallas proposed SB 241 in the Senate Committee on Business and Commerce to allow residents the ability to opt out of smart meters, citing personal privacy. In SB 1219, Sen. Wendy Davis, D-Fort Worth wrote legislation that required customers opt-in to third-party affiliates getting the data being sent to utilities. Privacy is a big concern for Texans. That being said, why are smart meters being treated differently than other data-intensive products? Specifically, what them different than credit cards?
By and large, credit cards and smart meters have many parallels: both track customer consumption, whether it be energy or other goods. Both technologies provide the majority of their benefit to the business. Utilities can run more efficiently and charge more fairly. Banks and payments networks make huge profits from high interest rates and convenient spending. Both have the potential to sell their tracking data to third parties. Both utilities and credit card companies have an inherent interest that conflicts with the customer (buy as much stuff/electricity as possible).
There are some noteworthy differences: Smart meters need limited opt-out or else the utility benefits are highly restricted. The benefits for customers is much more nebulous for utility customers than it is for credit card users. Utility customers don’t know how much money they’ll save. In fact, if they use a lot of power during peak times, their bill could actually increase. The benefits are also less immediate. A credit swipe is immediate; it saves your pocket from change; it allows you to carry debt until payday. Smart meters are more like the savings from warehouse retailers like Costco and Sam’s Club. There is an upfront cost with membership and even buying in bulk – you buy 100 rolls of toilet paper instead of 10 – but over time you see savings. This is much less alluring than the instant gratification/benefit of credit cards.
For smart meters to overcome privacy fears, they need policy structures that make privacy rules transparent. It also needs to continue havimg this popular debate. Just as credit cards took decades to become ubiquitous, smart meters must address legitimate public concerns and fears or else it will continue to struggle for adoption.