Smart Meter Deployment and Customer Opt-Out. Paul Gastineau Senior Director of Rates & Regulatory Research

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1 Smart Meter Deployment and Customer Opt-Out Paul Gastineau Senior Director of Rates & Regulatory Research September

2 CenterPoint Energy s (CEHE) Advanced Metering Journey Completed 2.3M meter installations Completed 5M remote service orders Deployed data analytics platform Received $200m Department of Energy Grant Went live with Advanced Metering System Launched Smart Meter Texas Portal Provisioned first Home Area Network Devices Regulatory approval of Advanced Metering System Following Hurricane Ike, Houston Mayor declares 2005 Smart Grid offers best Return on Investment Opened Energy InSight Center Initiated 10,000 advanced meter pilot 2

3 Facts about CEHE s AMS Deployment Period from 2009 through mid-2012 Awarded a $200 million SGIG grant from DOE Includes proprietary telecommunications network with public carrier backup Close to 2.3 million digital meters installed Nearly 100% of meters deployed (only 38 meter holdouts) System Operations Process over 220 million meter reads per day Over 6 million service orders completed electronically o average time to execute < 30 min. Actual reads available for 99.99% of unbilled revenue Approximately 600 thousand gallons of fuel saved An estimated 5,400 tons of CO 2 emissions avoided 3

4 Consumer Benefits of AMS Available NOW Remote meter reading and on demand re-reads Faster, automated move-in/out, switching $24 million in fees saved in 2012 Facilitates pre-paid service and time-of-use rates 15-minute usage data to promote energy conservation via Energy analysis and cost comparison tools Easier integration of distributed generation and renewables Available SOON Automatic outage notification 71 percent of participants in CEHE s In-Home Display pilot program indicated that they have changed their electric consumption behavior as a result of the information available.

5 Successful Deployment was not without its Issues Meter Accuracy RF Health Concerns Data Privacy 5

6 AMS Deployment: Trouble in Paradise Smart meter complaints: A/C units stopped working, Garage doors mysteriously open and, Computer hardware and modems suddenly fail All unfounded Houston News Reports: Power struggle: Local woman uses gun to stop worker from installing smart meter KHOU News 7/18/2012) Woman blames smart meter for house fire (KHOU News 8/23/2012) 6

7 AMS Deployment had its Share of Supporters as well With 2.3 million smart meters installed, satisfied and grateful homeowners took the opportunity to express their support for utilities such as CEHE:..If you would like to have electricity delivered to your home then the power companies have the right to see how much you are using in the most efficient manner possible. If you don't want the utility company representatives coming onto your property or "spying" on you, then go to the expense of purchasing your own equipment to make your own power! 7

8 CEHE Addresses Smart Meter Concerns Myths about Smart Meters Smart Meters are not as accurate as old analog meters My smart meter made my electric bill go up Smart meters give utilities too much control Smart meters are highly vulnerable to hackers Smart meters are for utilities not consumers The Reality of Smart Meters Independent tests show smart meters to be very accurate Consumption and rates drive electric bills Smart meters give consumers more control over electric usage CEHE has a comprehensive cyber security system Smart meters can benefit consumers, the environment and the economy 8

9 CEHE Minimizes Smart Meter Opposition 100 smart meter holdouts. CenterPoint Energy Working one-on-on reduced number to less than 40. 9

10 The Importance of Consumer Education The more consumers understand, the more favorable they are towards technology 80% 63% 55% 31% 41% 37% Somewhat favorable Very favorable 24% 22% 43% Smart Meter Technology (Unaided) Energy InSite (Unaided) Energy InSite (Aided) (After reading product description) CEHE Customer Knowledge of Smart Meter Technology 10

11 Texas PUC Responds to Smart Meter Complaints Public Utility Commission opened a rulemaking proceeding in February 2012 to solicit comments. Consumer groups petitioned for a hearing to voice their concerns. The Texas PUC found no health risks associated with RF exposure. 11

12 PUC and Texas Legislature Consider OPT Out Issues In early 2013, some 200 people attended a public hearing. Data Privacy provisions were however, included in Sunset Legislation. The Texas Legislature also examined several Opt Out proposals but none passed. 12

13 Opt Out Issues Who contacts customer? How many meter choices? Who pays? Customer switching? Time of use rates? Transmit data to ERCOT? Mesh network reliability? 13

14 Opt Out Rule Provisions Allows customers to Opt Out Three meter options: AMS meter with communications turned off, non-transmitting digital meter, or analog meter (if commercially available). One-time charge to install and remove non-transmitting meter. Monthly charge for reading meter, customer billing and sending data to ERCOT. TDU costs shall be borne solely by each Opt Out customer. Opt Out customer must acknowledge in writing: limited retail choices (i.e., no TOU rates), longer lead time to switch providers, and potentially slower restoration times. 14

15 Opt Out: Is the Battle Over?? Disappointed with the outcome at the Legislature and PUC, smart meter opponents are exploring new avenues Appeal previous denial of request for no-fee opt out The smart grid is set up as a surveillance device and we must insist that they reconfigure the overall smart grid technology Association Possible class action or fraud law suits with respect to the deployment of smart meters. 15

16 EEI - Fall Rates and Regulatory Affairs Committee Meeting Questions??????? Paul Gastineau Senior Director of Rates & Regulatory Research 16

17 DOE Acknowledgement and Disclaimer Per the DOE Grant Agreement Signed by CenterPoint Energy: If you publish or otherwise make publicly available the results of the work conducted under the award, an acknowledgment of Federal Support and a disclaimer must appear in the publication of any material, whether copyrighted or not, based on or developed under this project, as follows: Acknowledgment: This material is based upon work supported by the Department of Energy under Award Number [DE-OE ] Disclaimer: This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Referenced herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinion of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof. 17