THE NATIONAL ASSOCIATION OF
STATE UTILITY CONSUMER ADVOCATES
ADVANCED ELECTRIC METERING AND ADVANCED ELECTRIC METERING INFRASTRUCTURE PRINCIPLES OF THE
NATIONAL ASSOCIATION OF STATE UTILITY CONSUMER ADVOCATES
Whereas, the National Association of State Utility Consumer Advocates (“NASUCA”) has an earnest and long-standing interest in issues and policies that affect electric customers, including issues and policies that involve new technologies, reliability of electricity service, and rates; and
Whereas, many states and utility service territories are considering implementation of or are actively implementing advanced electric meters with the goals of reducing operational costs, increasing efficiency, increasing electric reliability, collecting real-time information about electricity usage and providing such information to customers, reducing electricity usage at peak times, achieving environmental benefits, enabling dynamic pricing options, et al.; and
Whereas, the interests of the public as electric consumers are of paramount concern, since deployment of advanced electric meters is ultimately paid for by electric ratepayers and will affect their electricity usage, rates, bills, and equipment in their homes and businesses; and
Whereas, in this Resolution the terms “advanced meters” and “smart meters” shall refer to advanced metering infrastructure (“AMI”) that is composed of at least the following characteristics:
(i) the ability to measure and record electricity usage data on a time-differentiated basis in at least 24 separate time segments per day,
(ii) the ability to provide for the exchange of information between the electricity supplier or provider and the customer’s electric meter in support of time-based rates or other forms of demand response,
(iii) the ability to provide data to such supplier or provider so that the supplier or provider can provide energy usage information to customers electronically, and
(iv) the ability to provide for net metering where applicable.
NOW THEREFORE, NASUCA RESOLVES:
That NASUCA supports the following principles to ensure that any implementation of AMI by electric utilities includes appropriate policies and procedures and reduces or eliminates potential negative impacts on customers:
- That prior to implementation of advanced meters, states should consider the requirements of Section 1307 of the Energy Security and Independence Act of 2007 (now codified at 16 United States Code § 2621). States and utilities should also conduct a detailed analysis of the costs and benefits of a proposed advanced metering program and attendant rate design changes, if any, including but not limited to consideration of the following items:
- the bill impacts resulting from rate design changes, such as time-of-use and critical peak pricing rates, on different residential and business customer classes;
- the bill impacts or other effects on users in various usage and demographic profiles, including low-income consumers, elderly consumers, consumers with severe health conditions, and other consumers whose electric loads are relatively low or not easily shifted to off-peak times of the day;
- how the costs of additional equipment that would be necessary to be purchased or rented by individual ratepayers in order to participate in any voluntary or mandatory utility advanced metering program affects the cost-benefit analysis;
- how the costs of advanced metering included in rates are allocated among the various classes of customers served by the utility; and
- whether an advanced metering program may lead to a reduced need to build new peaking capacity or transmission and distribution infrastructure, or to environmental benefits through decreased fuel use, or may reduce the electricity bills of some customers through dynamic pricing options, or may create other system or consumer benefits that offset the costs paid by ratepayers;
The above consideration of costs and benefits should be done through an evidentiary proceeding before the appropriate state or municipal utility commission.
- That since advanced metering is an evolving technology, states and utilities are encouraged to proceed with appropriate caution in ordering a widespread implementation of advanced meters, and to examine the experiences of other states. To avoid customer frustration and/or stranded costs, it is important to carefully consider, before approving any deployment proposal: (i) whether the proposed advanced metering product is or may soon become obsolete; (ii) whether the proposed advanced metering product has the required cost-effectiveness and functionality; and (iii) whether the advanced metering products or protocols are governed by national standards. States and utilities are also encouraged to balance the risks inherent with deployment of this evolving technology against the cost of inaction on advanced metering, including failure to achieve potential reductions in energy use and/or capacity needs;
- States and utilities are encouraged to consider the interaction of a proposed advanced metering program with broader “smart grid” measures that are associated with the distribution and transmission system (existing or proposed) to ensure, to the extent possible, that expectations of benefits of an advanced metering proposal are realized and the advanced meters do not become obsolete as smart grid infrastructure is introduced;
- To determine costs and benefits of a proposed advanced metering program to a geographically targeted area, states and utilities are encouraged, prior to widespread implementation of advanced meters, to consider running a pilot program that is properly designed and includes independent evaluation. States and utilities are also encouraged to design a pilot program to ensure accurate representation of the whole customer base in the relevant territory.