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Opting Out

Providing reasonable options for customers who object to smart meters.

Fortnightly Magazine - January 2012

rate than utility reads, and this incurs costs for manual bill processing, estimated bills, and call center responses. The alternatives in Figure 2 assume the legacy meter and the simple digital meter can be read by the customer.

Aside from the scheduled remote read, all the approaches shown in Figure 2 are available and practical immediately. Scheduled remote read isn’t offered in any current smart metering system, and might not be a viable alternative, but this idea is mentioned as a conceptual illustration of how the versatility of smart meters might enable new services in the future. The core of the idea is that the meter remains radio-silent all the time, except for a scheduled time once a month when it communicates by radio just long enough to rejoin the meter network and transmit one month of meter data to the utility. This might potentially be scheduled when the customer is routinely away from home. No one has evaluated whether this can be developed and implemented by providers, is acceptable to opt-out consumers, and is operationally practical for utilities. If it is, creating it would incur development costs for network control and data management, and numerous other technical functions, all of which might take years to create. The possible benefits might be offset by operational limitations or development obstacles that haven’t yet been identified. The point is that, with further public dialogue, utilities and their customers might be able to leverage the flexibility and re-programmability of smart meters to everyone’s advantage.

The costs of opting out will be higher than one might expect. Smart meters will reduce utility operating costs or mitigate the continuing increase. This operating cost benefit will be reflected in the electric rates of participating consumers, just as the commercial retailers’ loyalty programs return benefits to their customers. By choosing to opt out, the opt-out customers are declining these benefits, and their electric service costs will be correspondingly higher.

The efficiencies of smart meters will be gained by pervasive business process changes within the utility. The processes supporting current metering and meter reading will be eliminated, and many closely related functions— e.g., billing and call center operation—will be extensively revised. If opt-out customers wish to continue receiving the previous services, they must bear the cost of those services, which will no longer benefit from the economies of scale that previously applied.

Keeping the legacy meter is perhaps a good example of this. Many utility meters replaced in smart meter deployments are decades old, no longer produced or supported, technologically obsolete, and due for replacement soon whether smart meters are deployed or not. Keeping the old electro-mechanical meter might be compared to keeping an old computer. It might be comfortable to stay with what’s familiar, but if that item is no longer made or supported, the cost to keep using it will rise as fewer resources are available to service and operate it.

As the surrounding infrastructure and operations are modernized, it becomes expensive to continue operating and supporting old technology. For example, when an Internet service provider stops