9 Annex- Summary notes from committee
visit
Summary note of the working dinner hosted by PG&E
Tuesday 19 March
MEMBERS PRESENT:
Mr Tim Yeo (Chair)
Dr Phillip Lee
Albert Owen
John Robertson
Sir Robert Smith
Dr Alan Whitehead
PG&E REPRESENTATIVES PRESENT:
Cliff Gleicher, Senior Director, smart meter programme
Brian Rich, Vice President PG&E
James Meadows, Director, smart meter programme
INTRODUCTION
Mr Tim Yeo made an opening speech regarding the Committee's
inquiry into a smart meter roll-out in the UK and the possibility
of learning from the experience in California. Some of the differences
between the UK and California were noted—for example that
PG&E does not have pre-pay meters. Committee members enquired
about policies focused on the use of gas and PG&E stated that
there is no advance pricing on gas meters; instead, a reading
is given every hour so that computers can calculate the billing.
PG&E ROLL-OUT AND BARRIERS TO ROLL-OUT
PG&E outlined that California's policy discussions
about a smart meter roll-out started approximately 10 years ago.
Approximately six years ago (from November 2006), PG&E had
begun installing smart meters, and roll-out was now 96% complete.
With opt-outs (initiated in 2012), the number of meters accounted
for was 50,000 higher as of March 2013.
Much time and effort had been spent addressing issues
that had not been anticipated. Several cities had attempted to
ban smart meters through local measures, but this was unlawful
because the State had ruled to implement smart metering. Early
on there had been concerns about smart meter accuracy, but PG&E
said that many complaints about overcharging had been found to
be due to a broken pool pump or other source of high electricity
consumption that the customer did not know about and that the
smart meter had helped them find. In some cases when customers
had thought that their smart meter was overcharging, PG&E
suggested that in fact their previous, older analogue meter
had slowed due to weather and had become inaccurate and had undercharged
them, and that was why their bills were now higher. Very few customers
had raised concerns about privacy, which was heavily regulated
in California.
HEALTH CONCERNS
The main issue of concern for some consumers, and
the most publicised subject of discussion in California, had been
around radio frequency (RF) and electro-sensitivity. PG&E
reported that scientists believed that although people who claimed
to be electro-sensitive genuinely experienced symptoms, those
symptoms had not been found to be attributable to RF or smart
meters. It was also noted that many of those who protested against
smart meters used cell phones and microwaves. PG&E did not
know of any credible evidence linking smart meters to any of the
claimed health effects.
PG&E had retained scientists formerly or presently
with the International Commission on Non-Ionizing Radiation Protection
(ICNIRP), the World Health Organisation (WHO), and the Federal
Communications Commission (FCC) to advise it and report on RF
and the claimed adverse effects associated with smart meters.
In addition, it noted that the FCC and the California Council
on Science and Technology (CCST) had found that current standards
were well under the limits known to cause thermal effects, and
the CCST reported that studies had not confirmed any negative
health effects from non-thermal sources. However, opponents argued
that it would be at least 10 years before any non-thermal effects
were known.
CONSUMER BACKLASH AND THE OPT-OUT APPROACH
A consumer backlash against smart meters had not
been anticipated. Benchmarking reflected that sending a letter
or leaving a door hanger on people's doors would be sufficient
advance information about smart meter installation, but this had
turned out not to be the case for some customers. In some parts
of California, localities imposed ordinances against the installation
of smart meters. In one small town, it had been suggested that
PG&E staff attempting to install smart meters should be arrested.
This revealed the intensity of certain viewpoints.
In November 2011, PG&E had responded to some
customers' concerns by proposing that customers be permitted to
opt out, with those opt-out customers paying the overall costs
of opting out. PG&E proposed to enable customers to opt out
of having a smart meter by paying a one-time charge of $270 and
a monthly charge of $14, but this had not been accepted by the
regulator (the CPUC) which had reduced the one-time charge to
$75 and had introduced a lower monthly charge of $10. Low-income
customers paid a $10 one-off charge and $5 per month. This system
had been implemented in February 2012.
Other jurisdictions in the United States have taken
a different approach: in Naperville, mid-west Chicago, police
had accompanied smart meter installers on installation visits
and people had been arrested for interfering with smart meter
installation. Some utilities had said that they were not going
to have an opt-out programme, but then experienced similar issues
and chose to offer an opt-out alternative.
When asked whether PG&E could have refused to
supply electricity to homes that would not agree to have a smart
meter, PG&E advised that its tariffs allowed for that, but
that it would not have been good customer relations. It reported
that the regulator was examining whether whole communities should
be allowed to opt out.
For people whose meters repeatedly were not accessible
when a meter installer visited their home to install a smart meter,
PG&E had the ability to invoice the bill payer for the opt-out
charge. That way the customers ultimately had to decide either
to pay the opt-out fee or have a smart meter. If people failed
to pay the invoice charge, they could be disconnected. Prior to
opt-out, for customers who were uncertain about smart meter installation,
PG&E had kept a 'delay list' and had come back to them after
meters had been installed in properties where there was no objection.
Once these customers had found out about the opt-out charges,
many of them had ended up accepting a smart meter after all.
There were many anti-electromagnetic field (EMF)
organisations in the US, with many in northern California, southern
California, Texas and the north-east (including Maine and Chicago),
but there were few such places in-between. Interestingly, the
areas that PG&E had expected to be most pro-smart meter—liberal
urban environments—also had many anti-smart meter customers.
PG&E felt that the tide was now turning with
public opinion regarding smart meters being higher due to the
introduction of the opt-out system, which had given customers
a choice that they had not previously had. There has been much
less change among those who had opted out, and some of those people
still were not satisfied with the opt-out system because they
did not want their neighbours to have smart meters either. Overall,
about 35,000 of PG&E's customers had opted out of having a
smart meter—less than 1% of its 5 million electricity customers.
THE PRACTICALITIES AND COST OF ROLL-OUT
A street-by-street roll-out approach had been adopted
by PG&E, which was the sole electricity supplier in its area.
This approach had also been followed to some extent with gas meters,
but these were more difficult to install and so some of these
installations remained outstanding. On the whole, there had not
been too many difficulties with gaining access to meters as most
of them were on the outside of the property, but there had been
an occasional locked gate or basement to access. In one day, more
than 18,000 smart meters had been installed in an urban area.
It had been reported that one workman could install 30 to 40 per
day. However, this was less feasible in rural areas. Replacing
old meters with smart meters was not always simple due to the
complexity of having different meters to replace. PG&E had
trained its own staff and contractors, who had different levels
of expertise to address different installation types.
It was less expensive to read smart meters remotely
than to read meters manually, and the cost per meter of manual
meter reading had increased now that those meters were less common
and therefore further apart.
CONSUMER BENEFIT
Committee members commented that consumer benefit
was a central focus of roll-out in the UK and asked what benefits
were being realised by consumers in California. PG&E's initial
focus in its business case had been about reducing operational
costs, particularly from discontinuing manually reading meters.
Reductions in operational costs contributed, as did other efficiency
enhancements, to maintaining affordable rates. PG&E was also
looking at consumer benefit. The idea was that the savings from
smart meters would be passed on to consumers and that consumers
would have the benefit of being able to view their energy use
information to inform their choosing new rate plans to save money.
PG&E is now piloting the installation of in-home displays
(IHDs), which all its smart meters had the capability to communicate
with.
PG&E supported a move towards customers using
the internet to check their usage. Some 45% of PG&E customers
now had an online "My Account." PG&E also used print
mailers with energy efficiency tips and mobile phone SMS energy
alerts. For example, customers could be sent an energy alert by
text to let them know when their usage had reached a certain pre-agreed
level or when their usage was moving them into a new pricing tier.
These communication methods were also useful for informing customers
about outages and when these were being dealt with. Before smart
meters, companies had needed customers to report outages, but
now smart meters let them know when there was a problem. Smart
meters also had the ability to receive signals to: generate a
usage profile; provide a current analysis and progressive analysis;
and implement smart usage of devices.
PG&E was interested in enabling people to put
their usage information into a system which then told them which
of PG&E's approximately 170 tariffs would be best for them.
Committee members commented that the number of tariffs available
in the UK was being reduced because having a large number of tariffs
had not been found to increase competition. PG&E suggested
that the rate analysis option that could be offered with the information
gleaned from smart meters would give consumers the best tariff
based on behavioural use.
TIME-OF-USE TARIFFS AND DEMAND RESPONSE BENEFITS
PG&E emphasised the potential green benefits
of smart meters in reducing consumption. More aggressive pricing
led to better demand response. For example, a critical peak pricing
shift from 40 cents per kWh to $1 per kWh encouraged commercial
customers in particular to alter their usage. Some 80,000 domestic
PG&E customers had opted into a critical peak-pricing tariff
and 400,000 PG&E customers overall, including commercial customers,
were on time-of-use tariffs. PG&E had also introduced a programme
under which customers' air-conditioning units could be cycled
on and off to smooth out demand during periods of peak demand.
Committee members asked about inclining block tariffs,
which had been legislated for in California. When asked whether
smart technology was used to send signals to electric vehicle
charging points, saying when was the best time to charge, PG&E
reported that the capacity to do this was there but it was not
currently used. More information was needed about how many cars
were near to a transformer.
SMART GRID
PG&E has been beginning to integrate smart meters
into smart grids. So far, this has been used for remote billing,
remote meter reading, and remote connection when a customer moved
house or disconnection when bills were not paid. Smart meters
allowed PG&E to collect more granular data, which helped with
demand planning for gas and electricity.
The smart grid allowed for the remote use of switches
to diagnose and fix problems. However, as yet there was no data
interchange between smart meters and substations. PG&E described
"incredible outage benefits", and also reported that
the revenue theft network monitoring possibilities were excellent.
There were three high-powered transmission grids across the state,
balanced through an independent system operator which utilities
sold to and bought back from. Utilities had to do wholesale and
retail load forecasting, and smart meters made this easier. Smart
meters also had advantages for self-generators, including the
60,000 solar customers who were able to export the energy they
generated to the grid more easily. For this purpose, net metering
as opposed to feed-in tariffs were used, which enabled forecasting
of the net contribution of a household to the grid.
CONCLUSION
PG&E representatives agreed that customer communication
was key and that PG&E had not anticipated that when it started
its smart meter programme. If it was beginning a roll-out now,
PG&E would focus on communications, particularly to help customers
to better understand smart meter benefits early on. Holding meetings
with electors, city halls and other stakeholders was a good way
of promoting such communication.
Summary note of the Committee's meeting with the
California Energy Commission (CEC)
Wednesday 20 March 2013
MEMBERS PRESENT:
Mr Tim Yeo (Chair)
Dr Phillip Lee
Albert Owen
John Robertson
Sir Robert Smith
Dr Alan Whitehead
CEC REPRESENTATIVES PRESENT:
Drew Bohan, Chief Deputy Director, Office of the
Executive Director
Kevin Barker, Advisor to Chairman Robert Weisenmiller
David Ashuckian, Deputy Director, Efficiency and Renewable Energy
Division
Roger Johnson, Deputy Director, Siting, Transmission and Environmental
Protection Division
Mike Gravely, Manager Energy Systems Research Office, Energy Research
and Development Division
Ivin Rhyne, Manager, Energy Systems Research Office, Electricity
Supply and Analysis Division
INTRODUCTION
The Chair of the Committee, Mr Yeo, explained that
the Committee was conducting an inquiry into smart meter roll-out
in the UK and was therefore interested in California's smart metering
experience, and also outlined Committee's wider interest in energy
efficiency.
Drew Bohan, Chief Deputy Director, Office of the
Executive Director, gave an overview of utilities in California,
with three investor-owned utilities and about 40 public/municipal
utilities. He also outlined the CEC's role, including its responsibilities
for granting licences for solar developments.
SMART METER ROLL-OUT IN CALIFORNIA
CEC representatives explained that smart meter roll-out
was nearly complete for the domestic sector in California, and
that roll-out for the industrial sector had been completed 10
years ago. The Lawrence Berkeley National Laboratory (LBNL) was
doing research on how well smart meters had been accepted.
PUBLIC CONCERNS ABOUT ACCURACY AND CHARGING
There had been problems in one particular area—the
Bakersfield Revolt—when consumers' bills had gone up and
people had thought they were being charged more by smart meters.
David Ashuckian had worked with the Division of Ratepayer
Advocates when he had worked at the California Public Utilities
Commission (CPUC). He explained that the first smart meter roll-out
in Bakersfield had coincided with a rate rise but people had not
realised and so had blamed smart meters for their increased bills.
There had also been complaints about accuracy, but some utilities
had responded that smart meters were more accurate than the old
analogue meters, some of which must have been inaccurate, and
that this accounted for any apparent change in consumption levels.
However, the DRA and CPUC had heard about some cases of inaccuracy,
with about 100 meters transferring erroneous information to suppliers.
In one case, a farmer had had a meter on a pump, which had not
been turned on but for which he had received a bill for thousands
of dollars. It turned out that smart meter accuracy could fluctuate
slightly above or below the actual reading, and because this meter
had not gone above nought, a fluctuation to slightly below the
actual reading had resulted in a false reading of minus 1, but
this had been expressed as 999 kwH, instead of minus 1 and so
a large bill had been generated as a result.
Dynamic and tiered rates were relevant because they
could cause bills to go up. There was therefore a perception that
smart meters would cause higher tariffs and it was a substantial
public image challenge to address this. The Lawrence Berkeley
National Laboratory had done some research in this area. On the
whole, opposition to smart meters in California opposition seemed
small and was based on misperceptions.
PUBLIC CONCERNS ABOUT HEALTH
There had been some public concerns about health
impacts, similar to those about cell phones, due to the two-way
communications system. However, no convincing evidence had been
found to support those concerns. Some public utilities took a
more proactive approach and this was thought to be an issue primarily
of education.
COMMUNICATIONS AND CONSUMPTION DATA
Smart meters in California used ZigBee Smart Energy
Profile (SEP) wireless technology, rather than WiFi, and there
had been some throughput issues. The transfer of information had
been so great that the system had not been prepared for it.
Smart meters could be used to give consumers a good
analysis of their consumption data to show their habits and how
they could reduce their consumption. There had been much more
public outreach of this sort among non-investor-owned utilities
such as the Sacramento Municipal Utilities District (SMUD), whose
customers had received smart meters much positively as a result
of better provision of information from SMUD.
It was a challenge to sort through all the data that
came from smart meters in a useful way and some utilities had
been struggling with this. Consumers could use a green button
on energy company websites to release their data to any third
party offering to help them reduce their energy demand.[295]
Other challenges with smart meters included: developing products
that would be of use to consumers; managing the standard of communications
and how open should this be; and addressing privacy issues.
PUBLIC CONCERNS ABOUT PRIVACY
There had not been much concern among consumers about
data privacy. There was good data encryption with smart meters,
but most meters had not had the home area network (HAN) capability
initiated anyway because consumers did not have in-home displays
(IHDs).
OPT-OUT
Before the opt-out had been introduced, about 200
customers at a time would parade in front of utilities protesting
about smart meters.
BEST PRACTICE FOR ROLL-OUT
Other companies or areas commencing roll-out would
be well advised to:
- give consumers sufficient information
about smart meters and the practicalities of roll-out, explaining
potential benefits and addressing potential concerns.
- use local groups, the company website, customer
relations staff and correspondence to communicate with customers
about roll-out and how to benefit from smart meters.
- phase in dynamic rates and use an opt-in system
for critical peak pricing.
- ensure that privacy is protected and that data
is secure.
- ensure the technology is robust and interoperable
through testing and that it can be updated remotely as far as
possible.
- be proactive about avoiding some of the pitfalls
that have occurred elsewhere.
SMART GRIDS
Committee members asked whether there was potential
for the smart grid to help reduce demand among heavy users and
whether there was a need for new generating capacity for peak
supply.
CEC representatives explained that while California
was a world leader on energy efficiency, it was not as advanced
when it came to demand response. It would be helpful to use the
smart grid to shave off use at peak load times, but this was complicated
operationally. Shaving peaks would not obviate the need for new
power stations, but would allow existing plant to operate more
efficiently and enable better distribution.
Electricity demand in California peaks in the summer
and troughed in winter. Many consumers managed their energy well.
However, some people wanted greater use of solar energy and electric
cars, which would make demand response even more important in
managing peaks. The technology required for greater use of electric
cars existed already, but the grid was not currently capable of
managing the demand that would be created.
On demand response, more had been done with flexible
demand than with day-ahead demand. The CEC had been working with
the military to help them achieve their emission reduction targets.
The smart grid in itself did not achieve aims in relation to energy
consumption, but it was a tool to help increase efficiency. Currently,
about half of meters' capability to interact with smart technologies
had not been used and the utilities had not initiated this functionality.
The concept that energy flowed one way to the end
user was changing. Solar PV was being used more widely but this
created new problems in smart grids with real-time information
flow and interconnection.
ENERGY STORAGE
There was more interest than ever at investor, state
and national level in energy storage. Following the passage in
California of AB2514, the Energy Storage Bill, research was being
done on whether batteries could be put into homes to store energy
and whether local networks could work in this way.
Home storage and distribution systems were being
implemented as part of micro grid. Systems were now entering the
5-10 MW range. Such systems were very versatile but cost was a
big factor. Demand response offered a fast change and efforts
were being made to use storage facilities to offer fast response
as well. However, this solution was more expensive and so different
technologies were being explored.
ENERGY EFFICIENCY
Legal and policy interventions
Various legal and policy interventions to increase
energy efficiency in California were in place, including:
- Executive Order S-20-04, signed
on 14 December 2004, which required State of California buildings
to be graded LEED (Leadership in Energy and Environmental Design)
silver or better.
- The Global Warming Solutions Act 2006, which
introduced a target to reduce greenhouse gas emissions to 1990
levels by 2020.
- The 2009 California Scoping plan, under which
homes had to be zero net energy by 2020, State of California buildings
had to be zero net energy by 2025 and commercial buildings had
to be zero net energy by 2030.
- The loading order for electricity resources,
under which energy efficiency and demand response came first,
new generation from renewable energy and distributed generation
resources came second, and clean fossil-fuelled generation and
transmission infrastructure improvements came afterwards.
On demand response, things were not really there
yet. There was a desire to be able to cycle people's freezers
off for short periods on peak days. However, demand response solutions
would not necessarily mean that new power plants did not have
to be built.
Energy efficiency drivers
Energy efficiency drivers included greenhouse gas
targets. Regulation, rather than a market-led approach had been
key to increasing energy efficiency. Regulations had saved California
$74 billion in energy savings, and California's per capita energy
consumption had been flat for the past 30 years whereas the national
average has increased—this was thought to be mainly due
to energy efficiency savings. Before new regulations were implemented,
it had to be shown that their aims could be achieved cost-effectively,
so there was a strong link to available technology.
Regulations on energy efficiency in appliances
Appliance efficiency regulations usually related
to performance, but sometimes applied to design. Without such
regulations, many manufacturers would not have been producing
goods that achieved energy efficiency aims. TVs had been made
more efficient as a result of regulations—for example, by
reducing the number of diodes—and this had had quite an
effect given the number of TVs now in use.
California's use of regulation did not conflict with
the market. Regulation created a level playing field for competitors
and set parameters. Many Californian standards had been taken
up in other states and the Californian economy had continued to
flourish. This was because regulations applied to products being
sold in California, not just to those manufactured there (it did
not have a large manufacturing base), so manufacturers elsewhere
made products to meet those regulations and sold the same products
elsewhere as well. Making a product more efficient did not necessarily
use any more energy during manufacturing, but the energy efficiency
gains are large.
Building regulations on energy efficiency
Building energy efficiency standards had first been
adopted in 1978 and were updated every three years. These standards
were developed in an open, public process involving regulated
industry, utilities and other stakeholders. Examples included
requirements regarding heating and cooling, lighting, roofing
and water heating.
Under the 2009 California Scoping plan, homes had
to be zero net energy by 2020, State of California buildings had
to be zero net energy by 2025, and commercial buildings had to
be zero net energy by 2030. This meant that buildings would have
to have a solar panel or other renewable energy source on site
to ensure they achieved zero net energy over the year.
Renewable targets
There was a regulation on utilities to meet 33% of
their load requirements through renewable by 2020. This target
did not include large hydro power, which was considered to be
environmentally damaging. Negotiations for 6,000 MW of combined
heat and power were ongoing and there was a moratorium on new
nuclear power stations.
Members of the Committee asked whether consumers
were concerned about the renewables targets, particularly in relation
to cost. CEC representatives explained that this was not the case
yet, although utilities had started to say that the smart grid
would cost consumers more.
The stringent air quality standards in California
meant that oil-powered stations could not be used. Under the Renewable
Portfolio Standard (RPS), power from plants outside California
also had to meet the same standards. California had the most aggressive
renewable targets in the US.
There was no official state policy on energy independence,
but discussions were ongoing about increasing the renewables standard
and having a 50-80 % emissions cut by 2050 which might bring about
de facto independence.
Summary note of the Committee's meeting with the
Sacramento Municipal Utilities District (SMUD)
Wednesday 20 March 2013
Members present:
Mr Tim Yeo (Chair)
Dr Phillip Lee
Albert Owen
John Robertson
Sir Robert Smith
Dr Alan Whitehead
CEC representatives present:
Jim Parks, Programme Manager, Smart Grid
Anita Clay, Economic Development and Partnerships
Introduction
Jim Parks, Programme Manager, Smart Grid gave some
brief background about SMUD, which he said served an area of 900
sq miles with a population of 1.4 million and had 600,000 customers.
It was the second-largest municipal utility in California and
the 6th-largest in the US. SMUD provided only electricity
(no gas or water) and had a peak load of 3,299 MW.
Mr Parks explained that SMUD had a monopoly in the
area that it served but that its prices were 26% cheaper than
those of local investor-owned utilities, so SMUD customers did
not mind the monopoly. It received about $1.4 billion in revenues
in 2011, but was a not-for-profit organisation so revenues were
reinvested. It had an elected board of directors and therefore
was not regulated by an external body as the investor-owned utilities
were by the California Public Utilities Commission (CPUC). Anyone
except SMUD employees could stand for election to the board.
Emission reduction aims
SMUD had set itself the ambitious target of reducing
greenhouse gas emissions by 90% from 1990 levels by 2050. This
was more ambitious than the state goal of achieving an 80% reduction
by 2050. Its projected resource mix for achieving this included
hydro, natural gas generation (until 2037), energy efficiency
measures and renewable. However, these projections showed an energy
gap starting in 2019 and widening out to about 8,000 GWh a year
by 2050; SMUD did not currently know how it was going to fill
this gap if it was to achieve its 90% reduction target.
Smart grid vision
Mr Parks presented SMUD's smart grid vision, which
included a microgrid and local energy production and storage facilities.
One source of local energy in the vision was the "poop to
power" biogas digesters that would use cow manure to generate
electricity. SMUD had also considered using fat, oils and grease
(FOG) to generate electricity at one of the dairy digesters, but
had rejected this idea because of air quality issues. FOG has
been used on other generation projects. Residential homes in the
vision had smart meters, home area networks (HANs), smart appliances
and electric vehicles. Commercial buildings had energy management
systems and their car parks had electric vehicle charging stations.
In October 2009, SMUD had received $127.5 million
of Department of Energy Smart Grid Investment Grant (SGIG) money
towards its $308 million smart grid project. This grant made up
65% of the $203 million SGIG money that went to California.
Smart meter roll-out
SMUD had now completed its roll-out of smart meters,
having installed more than 620,000 smart meters. It had started
its roll-out in rural areas and dense urban areas, but had halted
its programme after 60,000 installations when PG&E had started
having problems with customer refusal. At this point, SMUD had
rethought its approach, trained staff to give presentations on
smart meters and gone to local government and city council members
to solicit support. Before recommencing roll-out, SMUD had embarked
on a large consumer engagement campaign, telling people about
smart meters and getting local city councillors involved. The
fact that SMUD was community owned may have helped with consumer
trust. PG&E has made some blunders over the years and so trust
levels had been low before roll-out. However, if it had done more
community engagement that would have helped significantly.
During roll-out there had been some concerns among
consumers about privacy and the effect of electromagnetic frequencies
on health. Customers had been given the option of postponing having
a smart meter installed and initially 2,500 had done this. These
had been moved to the end of the programme and many of them had
eventually had smart meters installed when they had seen them
elsewhere. There had been a small but vocal minority linked to
nosmartmeters.org, who had particular concerns about health, including
a man who said he had got throat cancer a month after getting
a smart meter.
Opt-out
By the end of roll-out, 313 customers (0.05%) had
decided to opt out of having a smart meter and most of these had
a smart meter with the smart functionality switched off. However,
54 customers had refused this option and wanted an old analogue
meter. SMUD was going to let them do this because of their persistence
in regularly speaking up at board meetings.
Opt-out programmes were costly but were still subsidised
by other customers. SMUD customers opting out had initially been
charged an up-front fee of $127 and a monthly fee of $39.40. However,
SMUD had since moved to quarterly rather than monthly meter reading
for non-smart meters and this had allowed it to reduce the monthly
fee to $14. In contrast, the fees that investor-owned utilities
were able to charge had been set by the regulator, the CPUC, at
$75 up-front and $10 a month. However, SDG&E and SCE had requested
the ability to charge higher fees and the CPUC was expected to
rule on this in April 2013.
Communications strategy
SMUD's advice to another utility rolling out smart
meters would be to do as much communications as possible in advance,
to have a communications strategy and to use local forums for
communicating with the public. Its communications strategy had
included:
- discussions with customers
long before the first meters were installed
- focus groups with customers
- web information about roll-out, including an
interactive meter installation map
- regular public committee and board meetings
- more than 200 community presentations
- direct communication with customers.
Smart meter and smart grid usage
SMUD took hourly reads from smart meters, and customers
could access their consumption data online the next day. They
benefited from having secure online access to daily and hourly
energy usage information, faster reconnection upon moving house,
shorter outage periods and from having in-home displays and time-based
tariffs. Customers could also receive messages by email, SMS or
a message on their thermostat to let them know when they had reached
a certain point in their consumption, eg $75. Large differentials
in off-peak and on-peak pricing (eg 7.5 cents to 75 cents per
kWh) would be likely to bring about behaviour change.
Under the current tariff structure, higher users
were subsidising lower users because of the step up from one tier
to the next. Time-of-use (ToU) tariffs and critical peak pricing
were being tested with 8,000 customers. It was likely that they
would be mandatory in future as customers would be expected to
reduce their consumption. SMUD's current rate process proposes
mandatory ToU tariffs for all residential customers beginning
in 2018.
SMUD had an automated demand response (ADR) system
in use in buildings in which loads exceed 300 kW. One plant could
be shut down completely on peak days. Another way of achieving
load reductions was by cycling residential air-conditioning units
on and off, or by raising the temperature on the thermostat. SMUD
had been reluctant to use the air-conditioning cycling system
since a problem when a member of staff not used to operating the
system had turned off 100,000 residential air conditioners for
four hours instead of cycling it every 15 minutes. This was on
a hot day after a series of hot days and many residents did not
want to continue being signed up to the air-con cycling programme
after that.
Comparison between consumer-owned and investor-owned
utilities
California had three investor-owned utilities and
about 40 municipals. Mr Parks thought that consumer-owned utilities
had a greater incentive than investor-owned utilities to encourage
consumers to reduce their usage, as it was in their interests
to benefit consumers.
Consumer-owned utilities were not regulated externally
as investor-owned utilities were by the CPUC because they had
an elected board of directors who were accountable to local residents.
Summary note of the working lunch with Senators
at State Capitol
Wednesday 20 March
MEMBERS PRESENT:
Mr Tim Yeo (Chair)
Dr Phillip Lee
Albert Owen
John Robertson
Sir Robert Smith
Dr Alan Whitehead
SENATE REPRESENTATIVES PRESENT:
Senator Jean Fuller
Senator Carol Liu
Senator Kevin de León
Rachel Wagoner, Chief Consultant, Senate Committee on Environmental
Quality
Henry Stern, Principal Consultant to Senator Pavley
Melinda Pickerel, Senate Office of International Relations
Kellie Smith, Principal Consultant, Senate Standing Committee
on Energy, Utilities and Communications
INTRODUCTION
Senator Fuller reported that the smart meter installation
had suffered from poor timing, as roll-out had begun in August
when prices were high due to the hot weather. Senator Liu stated
that consumer education was key to a successful campaign. The
senators agreed that there was a political need to find the 'urban
adopters', so that if there were a mishap the programme might
still be salvaged.
The Chair Tim Yeo suggested that SMUD (Sacramento
Municipal Utility District) was ambitious in its greenhouse gas
reduction targets and enquired whether the senators had experienced
any consumer resistance to such ambition. Senator de León
confirmed that in the US there was also resistance and controversy
generated by price rises and the subsidisation of industry. Senator
de León described a 'tipping point' when price becomes
an issue. The subsidy comes from government, and while those with
the affluence to install solar PV do so, those on a lower income
scale might not benefit. There might be a 'price point shock'
for the consumer, who might not understand the wider, more abstract
discussion of energy policies. A central concern was ensuring
consumer support for policies.
John Robertson enquired how the senators had responded
to complaints from constituents who were struggling with higher
bill costs. Senator de León highlighted that constituents'
primary concerns related to public safety, crime and education
issues, particularly for the lower income strata of the public.
Senator Liu reported that the government had used the income from
utility companies to supplement general budgets.
John Robertson enquired what measures were being
taken to assist vulnerable people, since it was often the case
that little help was available and there might be a risk of disconnection.
Senator Liu stated that there was a care programme available.
John Robertson reported that the main problem was lack of understanding
on the part of consumers. Senator Fuller responded that in general,
lower-income consumers did not make complaints; additionally,
if income was below a certain amount then a reduced rate was payable.
The senators stated that taxes levied in the State responsibility
area could be very unpopular, with a number of constituents having
written letters to object. For Senator Fuller's counties, which
covered a very large area, there was a rule service fee in place.
Occasionally there were disconnections, and in this case, NGOs
were available to assist people on a one-off basis. Water was
a different issue: rates were rising and people are concerned
by the 30% rise. The rate was increasing due to the need for infrastructure
improvements, and the lack of a good water base.
John Robertson enquired whether smart meters had
made a difference. Senator Fuller stated that currently it was
too early to tell - some people were still concerned and others
were less interested, since they were already aware of when peak
times were. Senator Liu pointed out that SMUD provided a comparison
between current use and the previous year's use, which was very
instructive.
Albert Owen enquired how Senators had responded to
health concerns about smart meters. Senator Liu highlighted that
opponents were in a small but very vocal minority. It was agreed
that there would always be individuals who objected and that the
situation was easier now with the opt-out tariff in place. It
was stated that press coverage of smart meters had focussed on
the cost spike that accompanied their introduction, rather than
the health issues. Coverage has also been limited to local rather
than national press.
Senator Liu explained that there had been an agreement
between the Public Utilities Commission (PUC, the regulator) and
the utility companies to carry out smart meter roll-out. Dr Alan
Whitehead enquired whether the company benefits involved had come
to the fore of public debate on smart metering. In fact, it was
reported that the focus had been more on job losses caused by
operational cost savings, such as the laying off of smart meter
readers in some cases. SMUD, for example, had been obliged to
lay off staff. Senator Liu stated that companies might have saved
money, which might not have been passed on to consumers as yet.
It was agreed that lower-income customers were not so vocal on
the need for consumer savings, but that those in the higher economic
strata were vocal on this point. Senator de León stated
that questions remained about the cost savings for rate payers
and the relationship between the regulator and the state.
It was confirmed that the state goal was to be more
energy efficient and address climate change through a formal proceeding
of consultation which addressed cost and other issues. Regulators
were much more powerful in the US, since they determined how much
money a company could make. Dr Phillip Lee asked why the municipal
utility companies had not taken over, given that the rates they
offered could be much lower. Senator Liu reported that the municipals
would have to raise their rates in time, and informed Members
that the territories were determined by history. PG&E and
SMUD had established their jurisdictions over time; SMUD would
have to buy out the investor-owned utility if it wished to expand
its customer base - a past attempt had failed due to the extensive
litigation required and the lack of public support. PG&E had
mounted a scare campaign warning of massive costs to existing
SMUD customers, were SMUD to expand.
It was reported that gas prices were continuing to
rise in California, despite the discovery of shale gas in the
US. Senators stated that approximately 80 % of gas was imported,
with oil deliveries to the Los Angeles and Long Beach ports, through
two pipelines out of the Arizona area. Senators observed that
shale gas would not affect prices if it could not enter the state.
In fact, California was more likely to gas price
reductions from over-supply in states such as Alaska, for example.
Senator Fuller explained that in California, development occurs
very slowly due to extensive regulations. Nobody wanted a transmission
line, or other piece of infrastructure, in their back yard although
everyone wants the energy product. For example, the Monterrey
coastline was very beautiful, and the public did not want to see
interventions in this area. Dr Phillip Lee asked whether there
were any concerns over the possibility of inducing earthquakes
with fracking, due to the fault line. In Senator Fuller's area,
this was not considered an issue, as oil had been pumped in the
region for decades. By contrast, in North Dakota for example fracking
was different, due to different conditions. There was some concern,
but the main fear was that the aquifer could become polluted.
Senator de León pointed out that the Los Angeles basin
could have the richest in the world but regulations were too strict
to explore the possibility. The Senators also pointed out that
currently the State was grappling with the renewable portfolio;
if fracking were to begin then this portfolio would not be fulfilled,
and more ambitious goals for cap and trade and energy efficiency
would not be reached. The key issue was how to soften the blow
regarding increasing energy prices.
Chair, Tim Yeo, highlighted that in California, large-scale
solar projects were decided centrally, unlike in the UK. The Chair
asked whether there was any resentment or sense of disenfranchisement
as a result. Senator Fuller explained that many planning regulations
were already in place, which ensured that people could make themselves
heard. Where there were acres of empty space, the State could
exploit these areas first which tended to be less controversial.
John Robertson pointed out that the Scottish mountains could be
considered a desert equivalent, however after 14 years the required
upgrade and transmission lines were still not in place.
Chair, Tim Yeo, enquired about the progress of the
planned high speed railway across California, linking San Diego
with San Francisco and Sacramento. Senator Liu explained that
this was highly controversial due to the high costs involved and
the perception that the rail would not in fact be fast enough
to be termed "high speed".
Albert Owen raised the subject of opposition to nuclear
power in the State. Senator Liu stated that there were mixed opinions
on the subject, however there was currently no political would
for nuclear new build. In addition, the US had not yet developed
reprocessing of nuclear fuel. However, the general consensus was
that alternative sources of energy were needed, such as the solar
towers which Senators observed during a recent visit to Spain.
Summary note of the meeting with representatives
of the Senate Committee on Utilities and Commerce
Wednesday 20 March 2013
Members present:
Mr Tim Yeo (Chair)
Dr Phillip Lee
Albert Owen
John Robertson
Sir Robert Smith
Dr Alan Whitehead
Assembly representatives present:
Assembly Member Steven Bradford, Chair of the Assembly
Committee on Utilities and Commerce
Sue Kateley, Chief Committee Consultant for the California State
Assembly Committee on Utilities and Commerce
Davina T Flemings, Principal Consultant, Assembly Committee on
Utilities and Commerce
Introduction
Mr Steven Bradford, Chair of the Assembly Committee
on Utilities and Commerce, welcomed the Committee to California
and gave an overview of the work of the Assembly Committee, particularly
in relation to smart meters
Sue Kateley provided a presentation on the Committee's
experience of smart meter implementation, in her capacity as the
committee consultant on the Assembly side of the Legislature dealing
with smart meter and energy efficiency issues.
The Committee on Utilities and Commerce addressed
a broad range of climate change legislation and issues, in particular
the issue of rates and rate reform. The Committee was examining
the higher tier rates, which impose higher charges on high consumption,
and exploring how this could be adjusted to balance the payment
of tiers. Chair Steven Bradford also explained the difficulty
of implementing new policies due to extensive regulation - in
some cases, simply felling a tree could take many years. There
were many challenges in this area.
Chair, Tim Yeo, pointed out that some of California's
climate change targets were highly ambitious, and enquired about
consumer pushback on such policies. Chair Steven Bradford agreed,
explaining the need for policies to have tangible consumer benefits,
such as the Proposition 39 on energy efficiency which had just
been passed. Concerns remained that there would be a backlash
which would undermine the state's tiered-rate model. Currently
residential customers are able to opt in to time of use tariffs,
however in future there may be a mandatory tiered time of use
structure which may cause confusion for consumers.
In a more general discussion of renewable technologies,
the Chair, Tim Yeo, reported that marine renewables remained about
10 years from commercial viability, and transmission issues were
significant. Offshore wind remained unpopular due to its adverse
aesthetic effects upon the coast line.
SMART METERS
Although smart meters appeared to have been implemented
more widely in Democrat areas, it was reported that the penetration
of smart meters in the US was a reflection of the readiness of
technologies rather than a party political issue.
The delay to smart meter installation was largely
due to privacy concerns. There was significant public concern
about privacy issues relating to Home Area Networks (HANs), and
also instances of predatory selling. There was a widespread concern
that data regulation would somehow undermine entrepreneurship,
leading to a reluctance to legislate in this area. Indeed, California
deployed smart meter technology far before the standards, codes
and regulations were in place.
Some studies seem to suggest there could be health
impacts from smart meter radio waves, although public opposition
had been largely overcome with the introduction of an opt-out.
The tiered system meant that energy prices went
from 11 cents to 42 cents per KWh. Some consumers attributed the
increase in rates to smart meters. PG&E had made the top two
tiers the same rate, since the bottom two tiers were capped, which
increased energy bills for more intensive users. In addition,
some smart meters had given false readings, although this had
happened only during initial deployment due to a short-term software
malfunction. The loss of employment for meter readers as a result
of remote reading was also a concern.
Public support for energy efficiency was high in
California, but the costs of renewable contracts would be substantial,
pushing energy rates up. Chair, Tim Yeo, pointed out that the
benefits from smart meter roll-out appeared to accrue almost entirely
to energy suppliers, which was likely to undermine public support.
Indeed, one of Sue Kateley's reports questioned the benefits for
consumers, particularly for natural gas consumers. An additional
benefit, which could potentially be added to smart meters for
gas would be the detection of gas leaks, but this feature was
not currently installed. An unexpected benefit of smart meter
installation was reduced vehicular accident rates, due to meter
reader vehicles no longer being needed.
A wider issue in California related to whether the
state regulator could manage the utilities. There was a lack of
fiscal management of these companies, leading to concern that
the California Public Utilities Commission (CPUC) might not be
monitoring the accounts with the requisite care and attention.
Another of Sue Kateley's reports examined the costs of smart meter
roll-out for small-scale versus large-scale utilities. Further
issues of interest included making data on energy efficiency programmes
more transparent, so that outcomes of the $1 billion expenditure
in this area were clear. A forthcoming Committee evidence hearing
would examine the network security issue in more detail.
Visit to Lawrence Berkeley National Laboratory
(LBNL)
Thursday 21 March 2013
MEMBERS PRESENT:
Mr Tim Yeo (Chair)
Dr Phillip Lee
Albert Owen
John Robertson
Sir Robert Smith
Dr Alan Whitehead
LBNL staff present:
Chuck Goldman, Head of the Energy Analysis and Environmental
Impacts Department (EAE)
Mary Ann Piette, Head of the Building Technology and Urban Systems
Department and Director of the Demand Response Research Centre
(DRRC)
Introduction
Mr Yeo explained the purpose of the Committee's visit
to California as part of its inquiry into smart meter roll-out
in the UK as well as its wider interest in energy efficiency.
He noted that there were some similarities between California
and the UK, such as the vociferous minority of opponents to roll-out
and the difficulty of convincing consumers of the benefits, particularly
if they appeared to accrue mostly to suppliers. Dr Whitehead commented
that the area-based approach to roll-out in the US might be better
than the approach being taken in the UK, and added that it was
surprising that the benefits appeared to accrue mainly to suppliers.
Chuck Goldman, Head of the Energy Analysis and Environmental
Impacts Department (EAEI), gave some background about the Lawrence
Berkeley National Laboratory, his role and the energy landscape
in the US, noting that about 15 states allowed retail competition
and that the uptake had been significant among larger commercial/industrial
customers, but much lower for domestic, residential customers.
Mr Goldman explained that he led the EAIA, which
did work in several areas: energy efficiency policy and programme
design; sustainable energy; electricity markets and policy; indoor
environmental quality; international energy studies; and energy
policy, modelling and efficiency in China. The China Energy Group
had been doing work in relation to China for 30 years. He also
managed a technical assistance programme targeted at state energy
regulators for the Department of Energy in relation to energy
efficiency and smart grid implementation issues. In that context,
he had supported the regulatory commissions and their staff in
regulatory proceedings and workshops in a number of states, including
Michigan and Maine, on smart grid implementation issues, including
on health and privacy aspects of smart meters and enabling technologies
to facilitate demand response and dynamic pricing.
The Environmental Energy Technologies Division (EETD)
was one of the largest divisions in LBNL, taking up about 10%
of its staff and budget. In total, the annual budget was about
$100 million, and 13 Nobel prize-winning scientists had worked
at the lab since it was founded in 1931. Currently, most of its
funding came from the Department of Energy, but some came from
the State of California.
ENERGY EFFICIENCY
Mr Goldman outlined the benefits of energy efficiency
as a resource, such as reduced consumption and costs, and noted
that smart meters were not necessary for energy efficiency.
He explained that customers in the US contributed
to energy efficiency programmes worth $5 billion and that they
were informed what this money was spent on. They paid about one
third of a cent per kWh towards these programmes, with retail
electricity prices for residential customers ranging from 6 to
20 cents per kWh depending on the utility and state. However,
68% of this spending was concentrated in 10 states, with California
having by far the highest spend on energy efficiency programmes
(one fifth of the overall spend).
Certain states had particular policy and legislative
requirements regarding energy efficiency. For example, six states
required utilities to acquire cost-effective energy efficiencies,
15 states had energy efficiency resource standards, and 28 states
required utilities to have demand-side management plans or energy
efficiency budgets. However, spending on electricity and gas energy
efficiency programmes in the US was expected to double or even
triple (to $10 billion or $15 billion) by 2025. This kind of spending
had the potential to nearly flatten load growth by 2025 in some
states. Indeed, California's per capita energy consumption had
been flat for the past 30 years, while average per capita consumption
had risen steadily for the US as a whole. This achievement was
largely a result of California's investment in energy efficiency
measures, including appliance standards, building standards and
obligations placed on utilities. Mr Goldman described a 'labyrinth
of energy efficiency policies' in California, including the energy
efficiency resource standard, the Renewable Portfolio Standard
(RPS), and integrated resource planning. These measures were estimated
to have saved $65 billion-worth of electricity and gas between
1976 and 2003, with 40,000 GWh of electricity a year being saved
in 2003 (against 1976 levels).
A key aspect of the energy efficiency measures involved
increasing the energy efficiency of buildings, but this had to
be done cost-effectively. The most aggressive energy efficiency
work had been done in the public sector, partly because of federal
targets to reduce energy use in federal facilities. Every federal
agency was ranked on its performance and given funding accordingly.
Many military facilities wanted to be self-sufficient in terms
of reliability and had attempted to procure on-site generation
because they saw access to energy as a security issue. Much of
this change in energy efficiency investments in the US had been
driven by economics from the customer and utility perspective
and not necessarily by concerns about climate change. For example,
commercial landlords benefited from lower operating costs when
they increased the energy efficiency of their buildings because
they had obligations to keep certain comfort levels in buildings;
increasing energy efficiency made it cheaper for them to do this.
Mr Goldman pointed out that smart meters would not 'save the day'
in terms of addressing poor housing stock, and that energy efficiency
policies could be of use prior to the installation of meters.
ADVANCED AND SMART METERS
When putting forward their plans for implementing
smart meters, utilities had had to show that what they wanted
to do was cost-effective to utility customers in terms of either
operational savings or peak demand/demand response benefits as
part of a business case proceeding to state regulators. In typical
business cases, most utilities projected that about 80% to 85%
of the benefits of smart meters/the smart grid would come from
operational savings, with demand response (e.g. peak demand savings,
need to build fewer peaking resources) and smoothing making up
a good portion of the remainder. Based on experience to date with
rolling out smart meters, many utilities had reported that operational
savings from smart meters had been realized in the field.
The EETD had been working with 10 utilities that
were rolling out smart meters, including some that offered in-home
displays (IHDs) and various types of time-based tariffs to customers,
including critical peak pricing, time-of-use (TOU) tariffs, and
peak time rebates. Part of this work involved randomised control
trials with large numbers of households. In aggregate over the
10 utilities, about 150,000 households had been assigned to treatment
and control groups. Aspects being studied included: what motivated
customers to sign up to and stay on time-based tariffs; how customers
responded to time-based tariffs; whether better results were gained
when customers had to opt into having a time-based tariff or when
they were automatically put on one and had to opt out if they
wanted a different tariff. Studies and evaluations of dynamic
pricing had also been done over the past seven to eight years
at a number of other utilities, although in many cases with somewhat
less rigorous experimental designs.
Many utility programme managers at these 10 utilities
had reported, as they had been rolling out smart meters and time-based
tariffs, that there were major gaps in consumer knowledge. For
example, many customers did not understand why electricity cost
more at peak times, and many did not fully understand the rates
they were on. Some customers did not believe there should be a
link between the cost of providing power and the rates they paid.
Many consumers thought that all energy in California was clean
and that energy from non-clean sources out of the state did not
have an impact on them. Many did not know which appliances, other
than air-conditioning units, used a lot of power. Mr Goldman suggested
a large educational effort was needed to overcome consumer resistance.
Oklahoma demand response study
In Oklahoma, there had been a very successful roll-out
of smart meters, and mechanisms such as variable peak pricing
and ToU tariffs were being used. An Oklahoma Gas & Electric
(OG&E) demand response study had looked at the energy savings
achieved by customers using either: programmable thermostats;
in-home displays (IHD); web-based consumption data; or all three.
The study had found that those with the programmable thermostats
saved the most, whereas those with IHDs saved the least—considerably
less than those with the programmable thermostats. Customers with
the web option saved slightly more than those with IHDs, and customers
with all three saved slightly less than those with just programmable
thermostats.[296] As
a result, Mr Goldman suggested that information/feedback to customers
was essential and that there were many delivery channels that
could provide this information, such as web-based portals, IHDs
and smart thermostats. However, at OG&E, the results from
programmable thermostats seemed particularly promising in terms
of cost-effectiveness compared to the current generation of IHD
devices, because cost differences were not significant and summer
peak demand savings appeared to be more predictable and larger.
A policy issue to consider was the extent to which it was worth
subsidising such control devices (eg, smart thermostats) in order
to get better demand management.
Mr Goldman noted that historic billing practices
in the US were very different to those in the UK for domestic
customers. In the US, domestic customers were used to getting
monthly utility bills, and 30 to 40 utilities now offered energy
information/feedback programmes that provided information to customers
on how their usage compared to that of their neighbours, identified
energy saving opportunities and showed trends in usage and bills
over time. Savings from these energy information programmes for
large groups of customers had been in the 1% to 2% range, with
rigorous experimental designs (randomised control trials with
treatment and control groups) being used. In most cases, utilities
presented this energy information/feedback to customers either
through mail-marketing materials (eg bill stuffers in their utility
bill) or through web-based portals.
US customers had received monthly bills and known
about their energy consumption for a long time but this had not
necessarily prompted behaviour change until utilities had started
offering energy information/feedback programs. With the roll-out
of smart meters, some of these energy information/feedback programs
now had even more granular—hourly or daily—information,
which showed how quickly and for how long customers responded
to energy information/feedback messages. Many US utilities might
decide to combine time-based pricing with energy information/feedback
programs because initial research suggested that most of the behavioural
response from domestic customers lasted only for days or weeks
in the absence of emergency or crisis conditions.
Mr Goldman urged that the UK should seriously consider
doing large-scale pilots using rigorous experimental designs to
develop realistic estimates of the savings that might be obtained
from time-based pricing, information/feedback devices such as
IHDs and other enabling technologies such as programmable communicating
thermostats, particularly given the historic differences in utility
billing practices, consumption and usage patterns among domestic
customers.
Home Area Networks (HANs) and gateways
The EETD had found from its smart meter research
that having the HAN integrated into the smart meter was not an
optimal strategy. For example, issues had been raised in relation
to customer privacy, as the integrated home gateway could be accessed,
and this system did not work well when the meter was far from
the device, so it was not always reliable for demand response
signals.[297]
An alternative system would be to install smart meters
with lower functionality and to use gateway boxes rather than
smart meters to provide a HAN. This system would require only
one-way communication between the smart meter and the HAN would
therefore be more secure. The gateway boxes could be used in conjunction
with secure servers to provide customers with price signals, messaging
and other information via the internet and smart phones rather
than via an IHD. An internet-based gateway would also enable companies
such as Siemens or Google to monitor price signals over the internet
and build technologies and applications for consumers accordingly.
Gateway boxes had the advantage of being easier to
upgrade and keep up with technology, and they would not need to
use Zigbee, with which there had been some technical issues. Zigbee
1.0 was currently used in the US and the UK was expected to use
Zigbee 1.2. The gateway boxes cost about $200 and they were already
being used in the US to control appliances. The EETD recommended
this gateway approach because it was more secure and because technology
and software companies were better placed than smart meter manufacturers
to design HAN hardware and software. Mr Goldman suggested that
although manufacturers were currently using the specification
SEP 1.0, SEP 2.0 should be used as standard for the next generation
of meters.
Consumer ability to opt out of having a smart
meter
As few as 2% of consumers had chosen to opt out of
having smart meters and numbers tended to decline as the benefits
of smart meters became more apparent. People's reasons for opting
out were diverse but health concerns remained unproven and smart
meters had been proven to be accurate. However, there was little
to be gained from arguing with consumers about opting out and
refusal could result in costly legal battles. A good compromise
was to allow consumers to opt out and then to charge them according
to what this cost the supplier.
Utilities could act to minimise concerns by engaging
with consumers before roll-out; ensuring that expectations were
realistic and that the accuracy of meters could be verified; and
by helping to ensure that consumers would be able to derive the
expected benefits from their smart meters.
DEMAND RESPONSE (DR) AND TIME-BASED PRICING
DR had been shown to shave the top off expected peaks
in demand by a maximum of 1,191 MW or 2.9% of system demand in
2006. DR capability during peak times was now as high as 10% in
a few states and could be as high as 16% by 2032. However, energy
efficiency was still important in reducing consumption overall,
as were static ToU tariffs, which allowed customers to alter their
consumption patterns to take advantage of lower prices during
off-peak times. Pilots to date showed that the opt-in approach
to ToU tariffs favoured the status quo, with fewer than 20% of
customers opting in. There had been less research on opt-out tariffs.
Another option was mandated choice, with consumers having to make
a decision.
Mary Ann Piette, Head of the Building Technology
and Urban Systems Department and Director of the Demand Response
Research Centre (DRRC) explained that the DRRC had developed open
automated demand response (OpenADR) to help reduce peak load and
prevent it from rising any higher. It was currently used mainly
in commercial properties, and some utilities were able to get
a 10% reduction on the peak when the price went up and commercial
buildings took immediate action to reduce their consumption. For
example, a bakery had bought extra pans so that it could turn
the dishwasher off at those times. [NB, with this kind of dynamic
pricing, customers receive price signals during peak demand periods
and take immediate action to cut consumption, whereas with static
ToU tariffs, customers know which times of day are cheaper and
plan their everyday consumption patterns to take advantage of
these cheaper periods.] Other possibilities for immediate responses
to price signals included lighting that dims automatically during
peak pricing times and automated thermostats that adjust by a
couple of degrees at peak times but which can be overridden if
the customer feels uncomfortable with the adjusted temperature.
Many organisations, small and large, were now using
OpenADR, including Siemens, Honeywell and Mitsubishi. It was being
used in Scotland and Japan, there were active pilots in Australia
and China, and other countries were also interested.
The Demand to Grid (D2G) Appliance Research Lab was
researching the use of OpenADR with appliances in the home.
Building Technology and Urban Systems Department
Mary Ann Piette gave an overview of the BTUS department's
work. Homes in California would have to be net zero energy by
2020, and commercial buildings by 2030. The department had worked
on several innovations that could help to achieve that aim. Successes
included:
- Energy efficiency windows,
including for the New York Times building
- Lighting sources and controls
- Energy-efficient data centres - 2-5% of energy
use in the US is from data centres.
- Healthy homes - ensuring that energy efficient
homes are properly ventilated so that emissions from carpets,
etc, are released.
- Automated demand response
- Cool roofs - roofs that look dark but that reflect
infra-red rays
- DOE2 and Energy Plus - tools for low-energy design
optimisation and retrofit analysis to support energy savings of
10-30% per building
The department was working on modelling buildings
so that they did not need air conditioning, controlling the level
of solar gain through windows, and enabling buildings to have
more flexible energy use—although such platforms are currently
expensive. This flexibility would be crucial when there was greater
use of wind and other intermittent loads on the system.
295 http://energy.gov/data/green-button Back
296
This research is expected to be published in summer 2013 Back
297
This research is expected to be published in summer 2013 Back
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