Smart meter makes it easier to monitor, tweak your energy use

As you read this, that utility meter outside your house silently spins. Pretty soon, someone from PG&E will come by and enter the numbers into a handheld device. You'll get a bill in a few weeks.

The milkman might be gone, but the meter reader lives.

But not for much longer.

In places like Italy and Bakersfield, in North Carolina and in San Francisco's Twin Peaks neighborhood, the "smart meter" has arrived. In the next three years, it will be here in Silicon Valley, too.

These advanced meters will offer new services, Pacific Gas & Electric says: Your electricity can be turned on or off remotely. The utility will know very quickly if there's an outage. And greater deployment of "time-of-use" rates that price power based on demand will be possible.

And there's a bigger vision. If the scenario unfolds as PG&E executives and others at companies such as Silicon Valley's Echelon foresee, that meter will be able to talk to your home computer. A smart thermostat or energy-management device will connect to intelligent appliances, telling them how to operate most efficiently.

The starting point is that utilities know very little about how much power their individual customers are using.

"Most customers would be surprised that a utility really doesn't know if power is flowing to their home or not," said Don Von Dollen, a manager with the Palo Alto-based, utility-funded Electric Power Research Institute. Installing smart meters represents

"the first time we're going to have a communication link to each customer," he said.

In July 2006, PG&E got approval from California's Public Utilities Commission to spend more than $1.7 billion of ratepayers' money to install 10.3 million smart electric and gas meters by 2012. Installation started in December 2006, in the Bakersfield area and Sacramento. Through this week, PG&E had installed about 435,000 smart meters and activated about 115,000.

PG&E is awaiting approval to spend another $625 million on even smarter meters. It's testing some in Twin Peaks to see how well their radio devices communicate in that hilly part of town, which has a plethora of wiring that could mean possible interference.

"Without these meters, we will limit the ability of people to truly change their consumption habits," said Michael Peevey, president of the state's Public Utilities Commission, which regulates PG&E. "However, it doesn't stop at the meters. Once the customer is informed, we must ensure that there is sufficient incentive to get the customer to take action."

That's what's motivating the installation of smart meters: demand response, the industry term for the need to reduce power during critical periods, usually

hot summer afternoons.

Getting people to use less power at those times is "the key to demand response," said Jana Corey, director of PG&E's Energy Information Network. Currently, PG&E relies on big commercial customers to cut back when demand is high. Soon it will be able to ask residential customers to help, too.

The goal is to use less energy, but to do it in a way that doesn't affect customers as much as blackouts, said EPRI's Von Dollen.

Here's how PG&E says the meters will work: While old-fashioned meters are read monthly by a person, residential smart meters will be read remotely every hour. Commercial meters will be read every 15 minutes.

The meters will eliminate the need for in-field meter readers, saving the company money. Some of its 900 meter readers will move to other jobs within PG&E. Others will soon reach retirement age, or are temporary workers.

This summer, in Bakersfield, the system will get its real-world test. A voluntary SmartRate program will allow residential customers to agree to much higher rates when demand peaks in return for a discount on the rest of their usage.

"We don't believe in mandatory programs," said Andrew Tang, PG&E's senior director of smart energy web. "We think you can create the right behavior through economic incentives."

Studies have shown, Tang said, that consumers use less energy - perhaps 10 percent less - when they get more information about power needs and costs.

Echelon, a San Jose company, worked with the Italian utility Enel to install a network of 27 million smart meters. Its products are in use from Austria to Australia, in Russia and in North Carolina.

Duke Energy, based in Charlotte, N.C., has started installing 57,500 Echelon smart meters. Besides calculating usage for bills, these meters will include disconnect, pre-pay and time-of-use rate capabilities.

Echelon, which also builds and sells smart thermostats and other home and commercial devices, has a big vision.

Take refrigerators. Right now, said Jeff Lund, an Echelon vice president, your refrigerator doesn't know if it's defrosting during a peak usage period, or what the cost of electricity is at that time. "You don't care when it defrosts," he said. "You just care that your refrigerator isn't frosty."

Not everyone agrees that installing smart meters is a smart decision.

In Bakersfield, the local newspaper and a TV station have had reports from homeowners who said their bills jumped once the smart meters were installed. "Something seems amiss with the smart meters," wrote a local columnist.

Jimmy Blunt said the average bill for his 2,200-square-foot home jumped from $316 to $420 a month after the meters were installed. "It was a little shocking," he said.

He filed a complaint with the PUC, and PG&E has said it will send someone out to check his meter, Blunt said.

"Until they can prove to me that it's not something in their system that's haywire, I don't think it's a good thing," Blunt said.

This concerns a consumer watchdog group, San Francisco-based The Utility Reform Network (TURN), which was against the meters from the start.

"One thing we know for absolute certainty, smart meters mean higher bills," said Mindy Spatt, a TURN spokeswoman. "Meters are not free.

"What we think consumers want are programs that save both energy and money," she said. "It doesn't look like the meters installed in Bakersfield are doing either one."

Paul Moreno, a PG&E spokesman, said the meters are working as touted. He said the complaints are anecdotal, reflecting unusual temperatures and people moving into new homes where they hadn't gotten utility bills before.

"This is not to say our deployment has been flawless, but the problems we have identified either had zero impact on customer bills, or were spotted before the bills went out or shortly afterward," he said.