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California and the West

'Real-Time' Metering Explored as Spur to Energy Conservation

Power: Backers say that if utilities charged more during times of peak demand, and consumers could monitor their use, fewer new plants would be needed.


SACRAMENTO — Should Californians be able to monitor their daily energy consumption as easily as they check stock quotes on the Internet?

That's the question surrounding so-called real-time metering, under which utilities could one day calculate consumers' bills based not just on how much electricity they use, but when they use it.

Energy experts and power producers say the change would encourage much-needed conservation, given the state's chronic shortage of electrons at times of peak demand. Some consumer activists and lawmakers have their doubts, however, citing the needs of desert residents and other Californians who have little discretion over when they must tap into the overtaxed power grid.

Proponents remain undeterred by such qualms. They say consumers, when made aware of the changing price of power, could realize savings, for example, by choosing to forgo running their dishwashers at the premium 9 a.m. time slot in favor of the bargain hour of 9 p.m. It's the difference, one economist says, between buying a dozen roses on Valentine's Day or in April.

"Roses cost a lot more on Feb. 14," said Severin Borenstein, director of the University of California Energy Institute in Berkeley. "It's not that there's price-gouging going on; it's that the system is much more strained."

Flattening electricity demand at peak periods, he said, could ultimately reduce the need to build new power plants and in turn help protect the environment.

Utilities in other states are already experimenting with time-based metering. Puget Sound Energy of Bellevue, Wash., for example, has installed more than 1 million advanced meter-reading devices at homes and businesses.

In many cases, existing meters have been fitted with communications modules, about the size of a thick business card, that transmit readings by radio signal every 15 minutes. The utility, which serves the Seattle area, collects the information nightly from a data storage center and processes it for customers, about 400,000 of whom are in a pilot program that gives them a monthly analysis of their usage broken into four times of day.

Although Puget Sound customers are still charged a fixed retail rate, a chart gives them an estimate of how much above or below that rate the utility paid wholesale. The company labels 6 to 10 a.m. as "expensive," 10 a.m. to 5 p.m. as "economy," 5 to 9 p.m. again as "expensive" and 9 p.m. to 6 a.m. as "bargain."

The same customers have also been able to review their electricity consumption from the previous day via the Internet. The company's Web site has received more than 1 million hits since November, and electricity use has dropped 5% during the same period, said Gary Swofford, Puget Sound's chief operating officer.

Customer Sue Genty, a commercial interior designer who works from her home in the Seattle suburb of Kirkland, said she checks her family's use weekly.

"I brought the kids in and showed them how it works," she said. "Now my little one runs around and shuts the lights off all day."

The program is more sophisticated than traditional fixed-rate pricing but falls short of true hourly, real-time pricing, though the utility is working toward offering such billing, among other rate plans.

In Sacramento, with summer and the threat of rolling blackouts looming, lawmakers are weighing real-time metering and other measures aimed at making Californians smarter, and more frugal, electricity consumers.

Gov. Gray Davis is considering a proposal, by UC Berkeley's Borenstein, to institute real-time metering and pricing for 43,000 of the biggest commercial users--those that consume more than 100 kilowatt-hours a day. The plan, which would require approval by the state Public Utilities Commission, would encourage such businesses to lower lights, reschedule shifts or otherwise adjust their operations to avoid paying higher prices.

"In California, about 70% of usage is corporate and 30% is residential," Davis said last week when meeting with Wall Street analysts. "So if the meters can get put into every major corporate and industrial concern in the state, they can be effective for this summer."

Borenstein estimates that the plan, which carries a price tag of $50 million to $75 million, could lower demand during crucial peak periods by 1,000 megawatts or more. That's about 2% to 2.5% of the highest demand on a summer day, or enough electricity to serve 1 million typical homes.

A study by the Palo Alto-based Electric Power Research Institute--a nonprofit organization that receives funding from utilities, power producers and marketers--concluded that a 2.5% reduction in peak commercial and industrial use last summer would have slashed energy costs in California by $700 million.

Borenstein advocates eventually extending real-time metering to residential customers.

The Independent Energy Producers Assn. also has called for the state to help finance a program for the utilities to replace 10 million meters with real-time models in the next five years.

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