All New Jersey electric utilities have proposed changing their customers’ meters to digitally networked ones since the state moratorium on them ended last year. These so-called smart meters enable utilities to cut costs and improve some services.
Smart utility meters are a routine extension of improved technology and bound to happen. They’re already installed on 90 million American homes.
But, as we said when Atlantic City Electric described its proposal last year, paying for them should reflect who benefits most from them.
The state Board of Public Utilities took a different approach recently when it approved New Jersey’s biggest utility, Public Service Electric & Gas, to spend $707 million the next four years to install smart meters for 2.3 million customers. Customers will get that bill beginning the next time PSE&G asks for an increase in its base rate for electricity.
One big advantage of the meters for utilities is they allow power usage to be read remotely on a computer. The workers who walk from house to house reading meters won’t be needed anymore, eliminating their jobs and substantial costs to utilities. For PSE&G, that’s a couple of hundred workers.
The meters also make it easier to manage the power supply, a big help in this age of myriad solar projects putting power into the local grid. And they can detect theft and collect data on customers (which is why we urged New Jersey to set legislative limits on such data collection to preserve privacy).
One smart meter benefit for utilities and customers is pinpointing outages, allowing quicker and more efficient response and repair. The meters also will let customers cut back the power into their homes and businesses at times to trim their bills.
Atlantic City Electric has proposed spending $220 million installing this “advanced metering infrastructure” for its 560,000 customers throughout South Jersey. The BPU’s approval of PSE&G’s plan establishes the framework for approving those of ACE and Jersey Central Power & Light.
ACE customers would pay an additional $4.25 a month or $51 a year for the smart meter project. The utility, which will get most of the benefits, expects to save $220 million over 15 years.
The director of the state Division of the Ratepayer said utilities should pay for smart meters themselves and recoup their investment over time. But under the BPU’s scheme, customers will pay for meters that provide lasting savings to utilities and have to hope they recoup their costs in reduced future rate increases granted by the BPU.
We suggested a compromise last year:
Let ACE and its customers split the cost of the meters and after 7.5 years a rate cut could reimburse customers for what they spent on the utility’s new technology.
But it looks like, as with so many costly state clean energy policies, ratepayers will be treated just like taxpayers — as a bottomless revenue source for improvement schemes that largely benefit others.