No Smart Meters in Palo Alto Before 2015

Utilities staff, the UAC and consultants have been reviewing the status of smart meters and their applicability for Palo Alto since 2009, and have concluded that it makes no economic or functional sense to install smart meters now. 

The feasibility will be studied further and by 2014 or 2015 costs and benefits may be better balanced and installation may be justified.

PG&E has been installing smart meters for more than three years and has gotten thousands of complaints about big increases electric bills and occasional complaints of health problems attributed to radiation from the
smart meters. Their installation in Palo Alto is inadvisable now. Costs would exceed benefits, and electricity bill savings for customers would be minor, only 1% for residential and ½% for commercial. 

Advanced Metering Infrastructure (AMI), or smart meters, allow remote meter reading and give customers and the utility data on current usage. This makes it easier to adjust electric usage to off-times when demand on the grid is less.

Installing AMI in Palo Alto would cost $16 million. Operating and maintaining the system over 20 years would bring costs up to $29 million, but benefits would be just $23 million. AMI requires greater customer involvement with the utility system so that they are more informed and can improve efficiency of electrical and water resources.

Staff efforts would be needed to reach out to customers and show them how getting involved could reduce charges and improve performance.  This would not be simple.

Distribution Automation (DA) allows more efficient system operation. Installation cost would be about $3 million, but savings would only be $2.7 million. Current system reliability is quite good.  Installing DA would have a net cost and wouldn’t significantly improve operations.

Costs and risks of AMI adoption in Palo Alto are declining, so in a few years the cost-benefit figures should be improved. Utilities staff and the UAC will continue to track and evaluate improvements and cost reductions in AMI and DA for 2 or 3 years. Meanwhile a number of programs could proceed:

a) Developing a robust gas and water meter maintenance and replacement plan that considers changing meters to smart meters.

b) Adjusting rates to encourage electric vehicle and other high electrical use applications to occur at off-peak hours.

c) Implementing Demand Response for large commercial customers and evaluate performance.

d) Provide incentives for large commercial customers to building management systems to be compatible with smart meters.

e) Developing long term plans for Distribution System Automation.

f) Analyzing potential energy conservation on the existing distribution grid.

g) Reviewing and updating AMI backend software cost estimates.

Palo Alto’s utility system is well regarded by customers, is relatively efficient and spends far less on customer complaints and outages than most other utilities. Moving slowly and carefully into smart meters is the
best approach.