Consumer opposition to smart meters slows upgrade of national grid

A growing consumer backlash against new wireless digital technology for measuring power usage is slowing U.S. utilities’ $29 billion effort to upgrade their networks.

States including Maine, California and Vermont have responded to customer concerns about higher bills and safety by offering them the option of keeping their conventional devices for an extra charge.

The fee may discourage drop-outs from the “smart-meter” program, in which household usage data is transmitted over radio waves to local utilities such as Central Maine Power, PG&E and Central Vermont Public Service, which can use the information to charge higher rates during times of peak demand.

“Charging fees for opting out is pretty outrageous,” said Charles Acquard, executive director of National Association of State Utility Consumer Advocates, which represents 44 consumer groups in 40 states.

Escalating consumer opposition is delaying efforts to deliver power more efficiently because the gadgets anchor next-generation transmission grids. Several utilities, including one owned by Warren Buffett’s Berkshire Hathaway, are holding off on roll-out plans until regulators decide whether they can force consumers to pay costs for the technology that utilities also refuse to pick up.

Smart meters, so called because they allow real-time usage monitoring, originally were pitched by the industry as a boon to consumers for increasing control over consumption. While the effort won grants from the Obama administration, consumer advocates say benefits have yet to materialize as promised.

A minority of customers complained the devices instead raise their bills, compromise privacy and risk their health with electro-magnetic fields emitted by the wireless technology. The devices also promise to save utilities money by eliminating meter readers, shortening response times to power failures, and allowing for remote switching when turning service on or off.

While the companies anticipate cost savings, they’ve pushed for the expense of buying and installing the new meters to be passed on through customer bills.

The meters are key to the “smart grid” being rolled out nationwide to increase delivery flexibility. Investment by utilities in the new grid has totaled $15.4 billion through the first quarter of 2012 and is projected to increase by another $13.4 billion through 2015, said Theodore Hesser, an analyst for Bloomberg New Energy Finance.

Not all companies are plowing ahead. In November, MidAmerican Energy, a utility owned by Buffett’s Berkshire Hathaway, told Iowa regulators it was waiting to deploy electric smart meters while it assesses how other power companies address complaints.

Alliant Energy’s Iowa utility told state regulators that concerns about raising customer bills and rapidly changing technology were among the reasons keeping it on the sidelines.

Last fall, Connecticut delayed its decision on Northeast Utilities’ proposal to install 1.2 million smart meters, saying it needed time to establish a state policy on the technology.

Edison International’s Southern California Edison, the state’s second-largest utility, said about 28,000 customers have asked for a delay of a smart meter installation out of 4.9 million customers, said Ken Devore, director of the utility’s smart grid program.

That will not interfere with its program that can offer benefits to its customers such as tracking and saving on energy use, he said. “These are safe, secure and high quality devices,” he said.

An increasing number of states are moving to motivate consumers to go along by permitting utilities to charge those who refuse the meters to pay an extra monthly fee. State regulators see “smart” technology as a way of reducing power consumption during periods of peak demand, reducing the need to build expensive power plants and easing the potential for black-outs from capacity that can’t keep up with urban growth.

Nine U.S. states including Texas and Michigan are either considering allowing customers to decline a smart meter or are allowing for that option, according to state regulatory filings and an April 2012 report from the Edison Electric Institute, a Washington-based industry lobbying group.

Regulators and utilities also point to government studies that say the devices are safe. In 2011, the California Council on Science and Technology, a state-created technology advisory board, said in a report it found no evidence from scientific studies that smart meters were harmful and the devices emit far less radio-frequency energy than microwaves or mobile phones.

Smart meters must meet Federal Communications Commission guidelines on emission levels and those that meet the standards and are installed properly are safe, agency spokesman Neil Grace said.

California regulators have approved smart meter programs and decided households that don’t want a wireless unit should pay for the costs of continuing to use their old devices, said Terrie Prosper, spokeswoman for the California Public Utilities Commission.

Utilities, which back the state-imposed fees, say charging consumers for keeping their old mechanical meters will pay for the workers dispatched to homes and businesses each month to record usage by hand, the old-fashioned way.