Just don't call it a 'smart meter'; Peco has begun installations

Last month Peco Energy Co. began installing the first of 1.6 million new-generation electric meters, part of a transformation that it hopes will revolutionize the way that customers communicate with the utility.

The new meters, which Pennsylvania is requiring for all large electric utilities, allow for two-way wireless communication with customers, setting the stage for time-of-use pricing next year. They also will improve utilities' ability to detect and manage outages, as well as to turn on or shut off customers remotely.

But please don't call them "smart meters."

The Philadelphia utility, which is undergoing a $650 million smart-grid transformation, has quietly stopped using the term "smart meter" to describe its "advanced metering infrastructure" (AMI). A recent customer mailing announcing the installation of the first 600,000 meters avoided using the term altogether.

"We did spend a lot of time talking to customers before we rolled out the project and found that the term 'smart meter' really seemed to mean something different to everyone," said Cathy Engel Menendez, Peco's spokeswoman.

It also has something to do with opposition from some quarters to the technology, which is turning "smart meter" into a term with unwanted baggage.

Prompted by fears of privacy losses or the health effects of wireless technology, some Florida Power and Light customers recently posted "Do Not Install Smart Meter" signs in their lawns. Several states have launched investigations into the technology.

A Pennsylvania legislator, State Rep. Mike Reese (R., Westmoreland) in February proposed legislation allowing customers to opt-out of having a smart meter installed.

The discomfort with smart meters is causing utilities to brace for the coming storm. Power companies prefer a uniform system of managing customer data, and fear a return to the days of manual meter-readings, which would be needed for customers who opt out of wireless meters.

"That would be troublesome," said Michael Wood, a spokesman for PPL Electric Utilities in Allentown, which installed advanced meters eight years ago.

Peco converted its customers to advanced meter reading technology in 2003, allowing the company to take wireless readings from each customer and eliminating meter readers. While the new technology allows for more frequent readings, as well as two-way communication, Peco argues that its customers have actually had "smart meters" for nine years now. The new meters are just smarter.

"The new meters just provide information for our customers that we've known all along, only now they can benefit directly from it," said Engel Menendez.

The new meters are part of a larger upgrade to Peco's distribution system announced in 2009. Peco's investment was supported by a $200 million federal stimulus grant, part of the Obama Administration's effort to accelerate "smart grid" rollout.

Smart meters will give customers feedback on time-of-day discount pricing to encourage off-peak consumption, making the power system more efficient. For customers who consent, utilities can control some home appliances, such as air conditioners, remotely by sending a signal to a smart meter.

Smart meters also will allow utilities to shut customers off remotely; currently, a crew has to physically disconnect the meter.

They also will improve utilities' ability to detect and manage outages. Peco said the improvements already installed allowed the utility to restore service within three days last year to the 500,000 customers who lost power during Hurricane Irene, a performance that was recognized last month with the Edison Electric Institute's Emergency Recovery Award.

But some consumer advocates fear that the new meters, which take readings as frequently as every 15 minutes, can reveal intimate details about activity inside a customer's house: when they are home; when they sleep; when they eat.

"I think the privacy issue is a real issue, but one that can be dealt with," said Irwin A. "Sonny" Popowsky, the Pennsylvania consumer advocate. "You can have a smart meter, but still have privacy."

In January the federal government proposed the "Green Button" initiative to standardize the presentation of electric usage data, allowing web and smartphone application developers to create tools to allow customers to download their own detailed energy usage data. Peco and PPL have signed on to the initiative, which the Pennsylvania Public Utility Commission endorsed last week.

Some of the potential benefits and pitfalls of smart-meter technology have already been experienced by PPL, the Allentown utility that serves 1.4 million customers over a territory stretching from Lancaster to Scranton. PPL's meters were the first in the state to capture hourly meter readings.

Last year, Dominion Resources, a competitive electricity supplier, turned 8,000 residential PPL customers back to the utility after their contracts had expired because it learned from the smart-meter data that the customers used a disproportionate amount of power during the day, when it costs more to supply.

"They dropped the least profitable customers, and sent them back to PPL," said Popowsky.

As the default service provider, PPL was required to resume supplying power to the customers, so the customer were never shut off. But Popowsky said he was troubled by the company's action. "They could be elderly customers who are home all the time and need the air-conditioner on during the day," he said.

The PUC is looking into the practice, said a utility commission spokeswoman.

PPL also introduced a time-of-use pricing system last year that was widely regarded as a failure. Initially, droves of customers signed up because its prices were set too low. When prices later were set much higher than the competition, there was no incentive for customers to stay and most fled. The utility is currently reworking its rate plan, which state law requires it to offer as a way to encourage customers to shift their loads to off-peak hours.

"Amazingly, we still have 3,000 people on the rate," said PPL's Wood.

Meanwhile one competitive supplier has stepped in to offer customers some special rates to take advantage of PPL's smart-meter data.

Direct Energy last year began offering customers the option of getting all their power for free on Saturdays in exchange for a higher rate the rest of the week. The idea was to induce customers to shift their discretionary power use — laundry, for instance — to an off-peak day, said Bethany Ruhe, a Direct Energy spokeswoman.

The response was so positive that Direct Energy now allows customers to choose any day of the week as their Free Power Day — most still choose the weekend. The company also offers a time-of-day rate, that encourages customers to shift usage to nighttime and weekends.

"As smart meter technology rolls out, the suppliers will respond with more innovative products," she said.

By this time next year, she said Direct Energy plans to offer smart-meter products to Peco customers, assuming Peco maintains its pace of installing 1,500 advanced meters a day.

"Tell them to hurry up," she said.

For more information about Peco's meters, see www.peco.com/technology.

Contact Andrew Maykuth at 215-854-2947 or amaykuth@phillynews.com or follow on Twitter @Maykuth.