800/985-6494

SmartMeters—Gateway to Higher Rates

Within the next three years, PG&E will complete installing SmartMeters for every electric service throughout California. These SmartMeters are a gateway to new ways that PG&E can charge its customers. Depending upon the size of the solar PV system and usage patterns, many of these new pricing strategies are not beneficial to solar customers. However, installing a solar system now can lock in the E1 residential rate, offering protection against the new rate schedules that are mandatory in 2009.

click here for large view

What is a SmartMeter?
Unlike traditional electrical meters that only measure total consumption, SmartMeters are small computers that communicate with a utility's central data center, providing real-time information on how much electricity a customer is using, and when it is being used. They were designed so energy usage could be correlated to the “true” cost of supplying the electricity, especially during peak demand times. This is important becausethe price that PG&E has to pay its suppliers for electricity usually peaks at certain predictable times of the day and the season. For example, it’s more expensive on hot afternoons in the summer when air conditioners are running full blast, and on cold mornings in the winter when everyone has the heat turned up. So if a homeowner decides to run the clothes dryer at 6 a.m. in the summer ,before the peak air conditioning hours begin, that electricity costs PG&E less than at 3 p.m. when everyone starts turning on their air conditioners. It’s simply supply and demand at work.

Currently, with a SmartMeter, consumers can choose to enroll in a time-of-use program that offers different rates based on different peak demand times. Theoretically, customers save on their energy bills by turning down their air conditioning or heating during peak times, helping to ease the load on the power grid. But why would someone want to do this when it is 100 degrees outside? Because, prices during the peak period are considerably higher than off-peak pricing, and on average, greater than any of the usual E1 rate (typical PG&E residential rate)

This pricing schedule is particularly detrimental to customers with a partial solar system if that system can not produce enough energy during peak demand. If the customer must purchase more energy from the utility company, it is often at the higher peak demand rate. A switch to time-of-use rates will be mandatory for solar users in 2009. Act now and you can be grandfathered into the E1 rate.

Once time-of-use pricing becomes the norm, the transition to real-time pricing [link to real-time pricing article] (spot electric cost charges passed on to customers based on day-ahead forecasts of energy costs) could easily be next. Real-time pricing is a scary prospect for any energy customer as prices fluctuate all day long based on the demands of the energy market.

Story Directory

Time-of-Use Rates—Good for Some, Bad for Others

Coming Soon—Energy Efficiency Upgrades Required, Rebate Payments Decreasing

Real-time Pricing—Putting Customers on the “Spot”

SmartMeters—Gateway to Higher Rates

Demand Response—Cutting Power to Save Energy

News Home