Smart meters help US utilities to cut customer bills Amy Ryan April 17, 2015

In the US, the Oklahoma Corporation Commission has approved a settlement allowing state utility Public Service Company to collect US$133 million from customers in rate increases to support smart meter installation.

The Public Service Company of Oklahoma serving 540,000 customers expects to save customers US$ 11 million in the first four years of using smart meters

Under the settlement, Public Service Company of Oklahoma (PSO) customers are required to pay a separate surcharge of US$3.11 monthly to fund smart meter deployment.

PSO filed its case with the commission in January 2014, after which a settlement was proposed in June 2014.

The utility began collecting interim rates in November 2014, due to the length of the settlement case. PSO has installed more than 140,000 smart meters to date.

According to PSO, the installation of smart meters will save customers at least US$11 million in the first four years of use through the elimination of meter reads and personnel having to perform repairs.

Adding to the recent approval of the surcharge settlement, the Oklahoma utility filed a separate application in March that would allow it to charge extra for customers wanting to opt out of the smart meter programme.

Commenting on the approval, Emily Shuart, director of regulatory services at PSO, said: “We are pleased that the commission’s order allows us to continue with plans to provide our customers with the many benefits of AMI meters, including website-accessible account and energy usage information, new energy management tools, faster outage restoration and enhanced customer service.”

Commissioner for the Oklahoma Corporation Commission, Todd Hiett, reportedly voted against the settlement, stating that while he supported the smart meter rollout, he was not happy about the surcharge that would form part of a separate rider on customer bills before smart meter installation is complete.

Mr Heitt explained: “When you’re talking about investments to enhance service to customers or infrastructure investments, that’s a managerial decision where a more proper approach is [needed] for the utility to make the investment and come back for full recovery.”

The Tulsa-based electric utility (Public Service Company) serves more than 540,000 customers in eastern and southwestern Oklahoma. PSO is part of the American Electric Power, an investor-owner electric utility in the United States, delivering electricity to more than 5 million customers in 11 US states.

ComEd to reduce electricity rates by US$50m

While PSO is in the initial phase of funding its smart meter infrastructure, ComEd has announced that it is moving toward reducing its electricity rates by 5%. The first reduced bills will be sent to customers at the beginning of June this year.

ComEd’s residential customer bills will decrease by at least US$2 due to lower energy costs. Bills will drop by another dollar in January 2016 when new energy delivery rates kick in.

The reductions will reduce the average monthly household electric bill to about US$87 from US$90, said the Illinois-based utility.

Under a smart grid bill signed into law by Illinois state governor Bruce Rauner approving tariff rate hikes to fund smart grid investments, ComEd signed on for a 10-year, $2.6 billion grid modernization program to upgrade its wires and substations.

The utility also has a target of installing nearly 4 million smart meters in homes and businesses, expected to be complete by 2018. A total of 540,000 advanced meters have already been deployed, with one million projected for 2015.

The decrease in customer bills comes as a surprise as ComEd had predicted it would need to increase tariffs again, however, senior vice president Thomas O’Neill cited “effective cost management and completing the smart grid work on budget” as some of the contributing factors to the decrease.

He added that smart technologies including “smart switches” installed on the local grid prevented more than 1 million outages in 2014 – saving the utility having to send out crews to restore power.

“The smart grid law was designed to do exactly what it’s doing today,” concluded O’Neill.