Smart Meters and Smart Regulation

The poor little smart meter…it keeps catching all kinds of grief when all that it wants to do is save the planet.

It is all things to all people. To utilities, regulators, and many environmentalists, it is the doorway to a modern green grid that will teach you to turn down your air conditioner when demand is high, and make it easier to rely on intermittent solar and wind energy. To many utility customers, it is black box that probably doesn’t count kilowatt hours very well. To some people, it is an uninvited and unwelcome persistent source of radio waves with possible health implications. Hired experts are trying to figure out whether the meters count things accurately, while others debate the significance of various health studies.
Here is where the public policy question gets interesting: how confident should regulators be that the devices are accurate and that they won’t hurt anybody before telling the utilities to install them everywhere? One thing is certain – California utilities are installing the meters first, and asking questions later.
An industry newsletter called California Energy Markets, in its August 13, 2010 issue, did a nice job of laying out the facts. The investor-owned utilities in the state, with the blessing of regulators, are methodically removing all of the old mechanical meters, and replacing them with computerized versions that measure usage every few minutes, and allow for two-way communication between customers and providers. A relatively small number of customers have reported dramatically higher bills since their meters have been switched. Pacific Gas & Electric Company, the utility in question, has responded by ordering tests for some of its meters. The regulators have ordered a study of their own.
Meanwhile, the change-out continues. Increasingly, other customers have raised health concerns. They cite a BioInitiative Report that they say explains the relationship between wireless devices and health, and a European Commission response that (without endorsing the findings) says that if the BioInitiative study is right, there is reason for concern. State Assemblyman Jared Huffman has asked the California Council on Science and Technology to chime in. The town of Fairfax recently placed a one-year moratorium on smart meter installations. California Energy Markets further reports that Capitola, Fairfax, Monte Sereno, Scotts Valley, and Santa Cruz (city and county) have joined San Francisco in asking for a halt to smart meter installation pending investigation of accuracy, billing, and other issues.
What is a regulator to do? In aggregate, these meters and their installation are very expensive. Should officials stop the statewide conversion because a few customers have received questionable bills? Should policy makers jump into action every time concerned citizens raise controversial health issues? Common sense might suggest that new equipment shouldn’t be installed when pubic trust is lagging behind. The process could be put on hold until studies are completed, but at what cost? And let’s suppose that those health questions won’t be decisively resolved for quite some time – if ever. Should the movement to smart meters stop because no one can be entirely sure if there a related dangers?

Some customers want to have a choice – to be able to reject the installation of a smart meter on their property. As of now, the conversion is mandatory, and is likely to stay that way. Does the imposition of a mandatory change place a greater obligation on policy makers to ensure that everything is safe? State law suggests as much, in the form of the California Environmental Quality Act and other laws. Officials are supposed to look for the potential of significant impacts first, and act later. A full environmental study would have at least pointed out the concerns, and helped regulators to determine whether there was any kind of problem worth mitigating. But there was no such study, which is why the regulators and the utilities now face a bit of a problem.

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