How to Stop Smart Meter Opt-Out Mandates from Advancing Across America?

Is this the future of smart meter rollouts?

Smart meter opt-out mandates are popping up across the United States, threatening utility smart grid efforts. But the key to data security, one of the major hurdles to consumer acceptance, may be held by a set of privacy rules debuting in Southern California.

Opt-out requirements aren’t new for utilities, but their rapid spread could slow efforts to modernize grid technology. In February, California’s Public Utility Commission (CPUC) approved a smart meter opt-out option for the state’s largest utility, joining Maine in allowing customers to keep their older analog meters for a fee.

In March, the CPUC extended that opt-out mandate to the state’s two main southern utilities, San Diego Gas & Electric (SDG&E) and Southern California Edison (SCE), covering nearly the entire state. Like Pacific Gas & Electric (PG&E) to the north, utility customers will have to pay up to $75 per person, plus $10 per month, for the privilege of staying analog. But California and Maine aren’t alone in promoting the opt-out mandate.

Opt-Out Mandates Spreading

Nevada’s Public Utilities Commission approved a similar program for NV Energy customers in late February, with a few key differences. Nevada’s opt-out would substitute analog options for digital devices that store electricity usage data but do not transmit it to the utility, and would postpone the opt-out option 60 days for the utility to file for a monthly fee structure. NV Energy expects about 7,500 opt-outs from 1.45 million meters, and may charge a $110 one-time fee with a $15 monthly charge.

The opt-out movement may soon gain more momentum in Georgia. Opt-out legislation recently passed in the state senate, and is currently pending in the state assembly. Unlike every other measure, Georgia would not allow fees to be charged to customers who prefer analog meters. The state’s largest utility, Georgia Power, has already installed smart meters for 90 percent of its 2.4 million customers.

Privacy by Design

Customer opposition has centered on two main points — privacy and data security concerns, and non-ionizing radiation from transmitting radios. Because smart meters essentially create the same amount of radiation as widely accepted products like cell phones, wireless phones, and wireless Internet routers, utilities haven’t focused on addressing these concerns. But data security is a real concern for consumers and utilities alike, and a collaborative effort may soon fix the issue.

California’s SDG&E is joining the Canadian province of Ontario to adopt the “Privacy by Design” code of conduct for all smart meter deployments. The system of rules would apply to smart meter manufacturers, grid managers, utility billing operations, and others to apply privacy and encoding by default in all settings.

The rulebook was designed by Ontario’s privacy commission, and has been integral to customer support for the province’s smart meter rollout to 4 million customers. What’s new with the Ontario-SDG&E model is making privacy data transparent to customers and regulators from start to finish — a big improvement over the lax practices of many utilities, which have been criticized in reports from the federal government.

Will It Work?

One of the biggest promises of smart meter technology, improving communication between the utility and customer, is also its biggest weakness. Privacy concerns are valid and important, so getting it right before a major hacking scandal erupts should be of paramount importance to utilities nationwide.

If SDG&E’s experiment works, smart meters could deliver on their potential to empower customers through time-of-use rates and demand response, reduce power outages, and reduce operational costs. But if it doesn’t quell privacy concerns, utilities may see even more opt-out mandates spread across the country, and the full future of smart meters may never be realized.

Image via norad4u.com