D.C. to Get Smart Meter Test

Michael Giberson

Progress. The Washington Post reports:

Pepco Holdings Inc. is planning to install “smart meters” in 2,250 District homes as part of a $2 million pilot project to give Pepco more information about residential electricity usage and give homeowners greater ability to manage power consumption and curb monthly bills….

About half the residences in the program will also get “smart thermostats” that will provide customers with information about real-time electricity prices and running usage so they can adjust air conditioning or the use of other appliances.

The price of electricity can vary widely depending on time of day and season. Summer rates at peak hours are 64 cents a kilowatt-hour; rates during non-peak hours are 6.81 cents.

Pepco would also have the ability to adjust the thermostats to prevent demand from overloading the transmission system. There are 15 “critical peak” days during the summer and three during the winter. Customers would be able to override Pepco’s adjustments.

Pepco said it will select the homes for the pilot project at random in all eight wards of the city and will install the new meters at no charge.

A curious detail, the pilot is formally being run by “Smart Meter Pilot Program Inc., a nonprofit company comprising Pepco, the District’s Office of the People’s Counsel and Consumer Utility Board, the International Brotherhood of Electrical Workers Local 1900 and the D.C. Public Service Commission….” Why set up a separate nonprofit, is this just political cover of some sort? Maybe just a way to get buy in from the regulators?

A spokesman for “Advanced Metering Data Systems LLC, the maker of the meter communications system, said that the devices have been installed in 50,000 homes in Birmingham, Ala., and that there are pilot projects in Gulfport, Miss.; Charlotte; New Orleans; Covington, La.; Jasper, Ga.; and two towns in Ontario.” Anyone know more about these projects?


12 thoughts on “D.C. to Get Smart Meter Test

  1. These may sound good to an economist, and to a techy, but are they really that valuable? Most people are going to run the A/C if and when they need it. The fridge runs all day. The only things of any significance that people might adjust would be to do their laundry/dishwashing at off-peak. Other than that, this just strikes me as a way to increase revenue for the utility.

  2. I think people are used to setting the A/C at whatever temperature that suits their comfort/budget trade off, and then don’t worry a lot more about it. But this is a habit that emerged in a world of flat retail electric rates, and a habit that places a lot of strain on the power system on the hottest summer days. That “lot of strain” leads to a lot of expenses incured by electric companies and transmission system operators as they seek to maintain system reliability. Many consumers would find it worthwhile to adjust their A/C a degree or two on the hottest days, if they were offered some of the savings that their change makes possible.

    Another part of the program, especially appealing to the economists-techie in me, allows the power company to remotely adjust the A/C. This sort of controllable adjustment can provide very targeted reliability benefits to the system, and save a lot of money relative to other ways of acheiving those reliability benefits. So again, if the company shared some of those savings with the consumer, seems like a good idea to me.

  3. I think people are used to setting the A/C at whatever temperature that suits their comfort/budget trade off, and then don’t worry a lot more about it. But this is a habit that emerged in a world of flat retail electric rates, and a habit that places a lot of strain on the power system on the hottest summer days. That “lot of strain” leads to a lot of expenses incured by electric companies and transmission system operators as they seek to maintain system reliability. Many consumers would find it worthwhile to adjust their A/C a degree or two on the hottest days, if they were offered some of the savings that their change makes possible.

    Another part of the program, especially appealing to the economists-techie in me, allows the power company to remotely adjust the A/C. This sort of controllable adjustment can provide very targeted reliability benefits to the system, and save a lot of money relative to other ways of acheiving those reliability benefits. So again, if the company shared some of those savings with the consumer, seems like a good idea to me.

  4. I would agree, generally, that many people would be ok with turning down their a/c a bit if they would get some savings out of it. The problem is that as I understand it, when you get on one of these programs, your peak rate goes way up, and your off-peak goes way down. Even turning up your tstat a couple of degrees is not going to really help you- your bill is going to go way up because of all your ‘unavoidable’ peak usage.

    If you could devise a peak/off-peak pricing plan that would not result in significant increases on the average bill, that would be one thing. But my guess is that most people would try to adjust their energy usage, and would still see a higher bill. So they pay more and sweat more, and the utility comes out smelling like a rose.

  5. I would agree, generally, that many people would be ok with turning down their a/c a bit if they would get some savings out of it. The problem is that as I understand it, when you get on one of these programs, your peak rate goes way up, and your off-peak goes way down. Even turning up your tstat a couple of degrees is not going to really help you- your bill is going to go way up because of all your ‘unavoidable’ peak usage.

    If you could devise a peak/off-peak pricing plan that would not result in significant increases on the average bill, that would be one thing. But my guess is that most people would try to adjust their energy usage, and would still see a higher bill. So they pay more and sweat more, and the utility comes out smelling like a rose.

  6. Industrial and office building often make ice in off peak hours, and melt the ice for cooling during peak hours. There is absolutely no reason that such a system couldn’t be downsized for a home.

    A lot of people work during peak hours. They can turn down their a/c, perhaps they could even turn it off completely. After the peak hours end, but before the homeowner gets home, the system could turn back on at full blast and bring the home back down to a tolerable temperature. This isn’t the best system for pets or wood furniture, but it can be done.

    The point is that a lot of capacity is built to be used very infrequently. The marginal cost of the electricity is high. Logic dictates that it be priced marginally so that resources are spent wisely. And, yes, some people can’t change their behavior and will have to pay 64 cents a kilowatt hour (youch!). But even they benefit by off peak rates of only 6.4 cents.

  7. Industrial and office building often make ice in off peak hours, and melt the ice for cooling during peak hours. There is absolutely no reason that such a system couldn’t be downsized for a home.

    A lot of people work during peak hours. They can turn down their a/c, perhaps they could even turn it off completely. After the peak hours end, but before the homeowner gets home, the system could turn back on at full blast and bring the home back down to a tolerable temperature. This isn’t the best system for pets or wood furniture, but it can be done.

    The point is that a lot of capacity is built to be used very infrequently. The marginal cost of the electricity is high. Logic dictates that it be priced marginally so that resources are spent wisely. And, yes, some people can’t change their behavior and will have to pay 64 cents a kilowatt hour (youch!). But even they benefit by off peak rates of only 6.4 cents.

  8. I suspect that this program is different from a standard “time of day” rate – where there is a simple on-peak and off peak rate structure. 64 cents per kwh sounds much more like a “super peak” rate that would only be in effect during the highest demand hours (maybe 100-150 hours per year). This is the time when supply costs can really spike – and this gives a true price signal to the customer. And since the high priced hours are limited, customers might really be willing to reduce consumption and save substantial money. This is a great idea and should work well.

  9. I suspect that this program is different from a standard “time of day” rate – where there is a simple on-peak and off peak rate structure. 64 cents per kwh sounds much more like a “super peak” rate that would only be in effect during the highest demand hours (maybe 100-150 hours per year). This is the time when supply costs can really spike – and this gives a true price signal to the customer. And since the high priced hours are limited, customers might really be willing to reduce consumption and save substantial money. This is a great idea and should work well.

  10. The program described in the article is experimental, in the best sense of the term. They are trying different configurations of rate designs, system controls, and meters, and they are randomly selecting participants from around the city. One of their trials apparently involves “super peak” rates, others are more like the standard time-of-use rates. All-in-all, it looks like an interesting and well-designed program (just judging from the newspaper story).

    I hope that the results from the program are publicly distributed. Too often the data and analysis from such investigations end up in a consultant’s report and filed away in the back office. How much more useful it would be if they release their report publicly, and even better if they made the resulting data available for further analysis.

  11. The program described in the article is experimental, in the best sense of the term. They are trying different configurations of rate designs, system controls, and meters, and they are randomly selecting participants from around the city. One of their trials apparently involves “super peak” rates, others are more like the standard time-of-use rates. All-in-all, it looks like an interesting and well-designed program (just judging from the newspaper story).

    I hope that the results from the program are publicly distributed. Too often the data and analysis from such investigations end up in a consultant’s report and filed away in the back office. How much more useful it would be if they release their report publicly, and even better if they made the resulting data available for further analysis.

  12. The program described in the article is experimental, in the best sense of the term. They are trying different configurations of rate designs, system controls, and meters, and they are randomly selecting participants from around the city. One of their trials apparently involves “super peak” rates, others are more like the standard time-of-use rates. All-in-all, it looks like an interesting and well-designed program (just judging from the newspaper story).

    I hope that the results from the program are publicly distributed. Too often the data and analysis from such investigations end up in a consultant’s report and filed away in the back office. How much more useful it would be if they release their report publicly, and even better if they made the resulting data available for further analysis.

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