Smart meters are safe, says Maine agency staff

The staff of the Maine Public Utilities Commission has issued a report concluding that the use of "smart meters" -- advanced utility metering infrastructure capable of communicating wirelessly with the utility -- is a "safe, reasonable, and adequate utility service."

Smart meters and other new utility technologies offer the opportunity to cut ratepayer costs while enabling new and innovative services.  Building on the ubiquity of cell phones, the internet, and other devices that can communicate using radio frequency emissions, smart meters can provide utilities with real-time data on each customer's consumption of electricity.  This can eliminate the need for traditional meter readers, enable utilities to manage outages in real-time, and can open up opportunities for real-time pricing of electricity.  Many utilities have adopted smart meters and other so-called "advanced metering infrastructure", including Maine's largest electric utility Central Maine Power Co.

But some people are concerned about the safety of smart meters, and in particular with the health effects of the radio frequency emissions associated with the meters' communication system.  Utilities around the country have faced questions, and even legal challenges, over the safety of smart meters.  As CMP rolled out its smart meter program, the Maine Public Utilities Commission received a series of complaints and requests for investigation into whether CMP's advanced metering infrastructure program complied with Maine law requiring utilities to provide safe, reasonable, and adequate utility service.

After legal proceedings before the Commission and Maine's highest state court, in 2012, the Commission opened an investigation into "the health and safety issue related to CMP's installation of smart meter technology."  That investigation led to Tuesday's release of a Commission staff report (67-page PDF) summarizing the evidence it had collected and staff's conclusions.  Highlights from the report include the following findings:

• The radio frequency (RF) emissions from CMP' s smart meters and other AMI components comply with duly promulgated federal safety regulations and other RF emission standards;
• No state, federal, or Canadian regulatory body or health agency that has considered the health impacts of smart meters (including Maine 's Center for Disease Control and Prevention (Maine CDC)) has found smart meters to be unsafe;
• The scientific evidence presented in this proceeding is inconclusive with respect to the human health impacts from low-level RF emissions generally;
• There are no credible, peer-reviewed scientific studies in the record that demonstrate, or even purport to demonstrate, a direct human health risk specifically from smart meter RF emissions;
• The studies that have been presented in the record to demonstrate the risk to human health from exposure to RF-emitting devices are based on exposure to substantially higher levels of RF emissions than smart meters;
• The relative RF emission exposure from smart meters is significantly less than other commonly used RF-emitting electronic devices; and
• CMP' s installation and operation of its smart meter system is consistent with federal and state energy policy and is a generally accepted utility practice throughout the country.

Based on these findings, the staff report concludes that "CMP's installation and operation of its smart meter system is consistent with its statutory obligation to furnish safe, reasonable and adequate facilities and service."  That said, the report also concurs with recommendations that continued research should be done on the impacts on human health from radio frequency emissions.

It now falls to the full Commission to take up the issue.  Will the Commissioners agree with their staff's findings and conclusion?

Maine utility launches time-of-use rates

A Maine electric utility has launched a program to offer residential consumers rates that vary depending on whether the consumption occurs during times of peak demand on the electric grid.  Central Maine Power Company's residential time-of-use rates are designed to encourage consumers to shift their use of electricity-intensive equipment to off-peak hours, generally between 8:00 p.m. and 7:00 a.m. and on weekends. How many customers will choose this option?  What effects will it have, both for the consumers opting in and for society as a whole?

Traditionally, electric ratepayers pay the same price for every kilowatt-hour of energy they consume, without regard to the time of consumption or to conditions on the grid.  But the cost of producing a given kilowatt-hour of electricity depends on factors including the portfolio of generators operating at the time, as well as on the instantaneous demand for electricity in the overall regional market.  Because they are not directly exposed to the real-time price of power, consumers individually and collectively may not make efficiency choices about how much power they consume, and when they consume it.  For example, energy prices are typically lower at night, when demand is reduced, but consumers have not traditionally had any incentive to shift their consumption to lower-priced nighttime hours.  Some utilities have offered industrial and commercial businesses time-of-use rates to encourage efficiency, but most residential ratepayers have not had this option in recent years.

Central Maine Power now offers residential consumers the option to choose time-of-use rates.  Prices during peak hours will be about 15 percent higher than under the default rate schedule, with off-peak prices about 20 percent below the default rates.  The structure offers the opportunity for consumers to choose to shift heavy-consuming applications like air conditioning and heating to off-peak hours.  This could save these consumers money - but it would require them to modify their behavior, invest in new "smart" technology, or both.  Will consumers find the opportunity for savings to be worth these changes?

The current enrollment window is open through January 31, 2013.

California utility time of use rates

California regulators have upheld a decision to change the way many business and agricultural customers are charged for electricity.  Under the new structure, known as "time of use" pricing, customers will pay different rates for the energy consume depending on the real-time balance of supply and demand.

Historically, electricity consumers paid rates set by state public utilities commissions that, in the aggregate, allow utilities to recover their costs and make a reasonable rate of return on their investment.  Typically, these rates for energy have been fixed in advance, changing only when a utility files a new tariff or secures its regulators' approval to raise the rates.  Absent such a change, customers' retail rates remained fixed throughout the day and the year.

In recent years, real-time wholesale markets have developed across much of the United States.  The true cost of producing and delivering power varies in real time, depending on the balance of supply and demand.  If consumers demand more electricity, more and more expensive generating units are required to serve their load, resulting in an increase in the true cost of power.  Conversely, at night or during mild weather, decreased demand typically leads to a reduction in the real-time cost of power.  Real-time wholesale markets are designed to allow utilities and other wholesale buyers to respond to price variations, buying more electricity when it is less expensive or conserving power when prices rise.  Most retail customers like homeowners and businesses are not directly exposed to these real-time variations, instead paying the utility's fixed tariff rates.

This paradigm is starting to change in parts of the country.   In 2010, the California Public Utilities Commission ordered utility Pacific Gas and Electric Co. to implement a variable pricing structure for many of its business and agricultural customers by next March. The utility asked the regulators to allow customers to opt out of the time of use rates and back in to their previous fixed rates, pointing to its experience with customer complaints over a lack of an opt-out mechanism for smart meters.

Last week, the commission upheld its earlier decision, noting that evidence suggested that few customers would see increased bills as a result of the shift to time-of-use rates. Will more regulators and utilities shift customers to time-of-use rates?

Report on 2011 New England electricity market

New England electricity markets operated competitively and relatively efficiently in 2011, according to a report filed with federal regulators earlier this week.  The 2011 Assessment of the ISO New England Electricity Markets (184-page PDF), prepared by New England's external market monitor, reports on how the market performed last year, with a focus on evaluating efficiency and competitiveness.

ISO New England Inc. is the regional transmission organization covering most of New England.  In this role, ISO New England performs three major functions: overseeing operation of New England's bulk power generation and transmission system, administering the region's wholesale electricity markets, and managing regional planning processes. ISO New England is regulated by the Federal Energy Regulatory Commission, and has both internal and external market monitors who review its performance.  The internal market monitor is a unit within ISO New England Inc., while the external market monitor is an independent outside consultant.  Potomac Economics currently serves as the external market monitor.

Potomac's report found that "the markets performed competitively in 2011".  One piece of evidence Potomac used to support this finding is that average energy prices fell 7 percent from 2010 to 2011 (from approximately $53 per MWh in 2010 to $49 in 2011).  According to the report, this is due in large part to a decrease in the average price of natural gas.  In Potomac's view, lower fuel costs translate to lower prices in a well-functioning, competitive market because fuel costs constitute the vast majority of the marginal costs of most generation.  Natural gas pricing decreases were not the only contributor to lower energy prices, according to the report; Potomac also noted that prices fell due to a weather-driven decrease in demand for electricity, stating that, "Average load decreased 1 percent from 2010 to 2011 and 2.5 percent from the summer of 2010 to the summer of 2011, primarily due to milder weather."

Potomac also found that "both the day-ahead and real-time markets operated relatively efficiently in 2011 as prices appropriately reflected the effects of lower fuel prices and load levels."  However, the external market monitor found that "real-time prices often do not fully reflect the cost of satisfying demand and maintaining reliability during tight market conditions, particularly when fast-start resources or demand response resources are deployed in the real-time market."  As a result, the report recommended a series of changes to the New England markets, including developing pricing changes to allow the actual costs of demand response and fast-start resources to be reflected in prices.

The report was filed with the Federal Energy Regulatory Commission on June 25.  It complements the 2011 Annual Markets Report (121-page PDF), released this May by ISO New England's internal market monitor.  The internal market monitor's report similarly found that the markets operated competitively in 2011.

April 12, 2011 - Google invests in Ivanpah solar

Google has committed $168 million in funding for what might be the world's largest solar project, proposed for construction in California's Mojave Desert.

Water spills over a dam near a paper mill on a river in Maine.

This story ties together several threads that run through this blog.  In February 2010, I wrote about the 392 MW Ivanpah solar project, and how it benefited from $1.6 billion in Department of Energy loan guarantees (the same program now at risk of being cut from the federal budget).  If built as proposed by developer Bright Source Energy, the large solar thermal project would the world's largest solar complex, featuring up to three thermal generation units.  Coincidentally (or not), that same day I followed up on an earlier look at Google's nascent interest in energy markets after it obtained market-based rate authority from the Federal Energy Regulatory Commission.

In the ensuing months, Google has emerged as a sophisticated player in the energy world - investing in underwater transmission infrastructure to connect regions and support ocean energy projects, buying power directly from a wind project, investing in fuel cell research and development, and promoting real-time electricity pricing and programs.  Now, Google can add an investment in utility-scale solar thermal projects to its portfolio.

Meanwhile, the fate of DOE's loan program remains uncertain; reports suggest that the energy portion of the budget is still being finalized, with a vote possible as early as Thursday.