Eyes on energy

The price of privacy is apparently $607 a year—or at least that’s the cost when it comes to the Sacramento Municipal Utility District.

This past April, SMUD finished installing smart meters throughout Sacramento, marking the completion of a three-year project to put electronic fingers on the pulse of every Sacramento ratepayers’ energy use.

The idea behind the meters is elegant. By sensing loads at all points in the grid, SMUD can regulate energy flows and pressures with exquisite efficiency.

As SMUD project manager Erik Krause explained, the utility expects to save at least $15 million a year in operational costs, thus honoring SMUD’s pledge to keep rates low.

Smart meters will also reduce dependence on fossil fuels, encourage alternative-energy sources, such as wind and solar, and limit greenhouse-gas emissions, according to the utilities.

A fraction of local ratepayers, however, wanted to opt out of the program, citing privacy concerns. But SMUD is charging these ratepayers to opt out—a one-time fee of $127, plus $40 on each monthly bill. So far, less than 1 percent of SMUD energy users have anted up.

Perhaps this is because few people understand how smart meters work. SMUD says it’s done its due diligence—board meetings that are open to the public, blog posts, Web pages, etc.—but most ratepayers still remain in the dark.

Smart meters permit a kind of “just-in-time” approach to energy distribution. As PG&E’s Paul Moreno explained, “Electricity is easy to move, but hard to store.” Smart meters let utilities generate—or buy—no more power than they really need.

Customers also benefit, argue the utilities. Electricity costs more when demand is high—typically late summer afternoons, when air conditioners are blasting—and smart meters, says Moreno, allow utilities to “offer incentives” to customers to curb peak-hour use.

As former SMUD general manager S. David Freeman put it: “If somebody’s fool enough to want to run his laundry at 2 p.m. on a hot summer’s day, he ought to pay for it.”

Critics, however, say smart meters bore a virtual keyhole through the door of every Sacramento household. They are little data generators. They are on duty 24 hours a day, 365 days a year. They never sleep, and they cannot be turned off.

The data they send back can be revealing.

As Martin Pollock of Siemens Energy—who, along with other global players such as General Electric Co. and Landis+Gyr, dominate this market—says these new meters “have the ability to record [energy consumption] every minute, second, microsecond more or less live. … We can infer how many people are in the house, what they do, whether they’re upstairs or downstairs, do you have a dog, when do you habitually get up, when did you get up this morning, when do you shower—masses of private data.”

A 2010 report published by the National Institute of Standards and Technology says it’s this data—and not necessarily the unburnt coal or gas—that’s the plum of smart meters.

Many “actors,” says the report, would like to get their hands on this info—lawyers, insurance companies, landlords, private eyes, sellers of trinkets and baubles, and, of course, law enforcement.

SMUD insists this won’t happen. Its meters aren’t so smart, it says—recording only in five-minute splits, rather than continuously. And anyway, all customer-usage records will be protected behind firewalls and “multiple levels of encryption.” It shall be a good steward.

Either way, smart meters are now fait accompli. Ratepayers can hope SMUD proves as its word—or pay the piper.