PUCN doubts smart meters will decrease rates

Critics say costs already have risen

LAS VEGAS — State energy giant NV Energy claims its smart meter program will save money that “eventually” will be passed on to ratepayers.

Some consumers, however, believe the meters will not only increase costs but are also unnecessary.

Ratepayers have raised various concerns about smart meters since 2009, when NV Energy received $139 million from the taxpayer-funded federal “stimulus” package to partially fund the program, named “NVEnergize.”

Eventually, customer anger forced the energy monopoly to propose several “opt-out” alternatives in late 2011. The Public Utilities Commission of Nevada (PUCN) is scheduled to rule on the options tomorrow, Wednesday, Feb. 29.

“[Taxpayers are] already in the hole $139 million, so I don’t see how we’ll get all that back,” said Mike Hazard, a Las Vegas resident and foe of smart meters.

Smart meters are digital electricity readers that transmit energy-usage data via radio frequency, according to NV Energy. Unlike the traditional analog meters, smart meters don’t require manual readers and report energy usage data every 15 minutes as opposed to once a month.

Although NV Energy claims it can use this data to help ratepayers lower their bills, the company continues to ask for rate increases. When Nevada Journal asked if the company would request a rate decrease as a result of the smart meters, the response from an NV Energy spokesperson did not answer the question asked:

Customers can use the daily usage information provided by our smart meter tools to make changes in their energy consumption, which could result in lower bills. NVEnergize will provide NV Energy with $25 million a year in operational savings, which will help offset the cost of the program. These savings will be eventually passed along to customers. (Emphasis added.)

The PUCN — asked the same question — said any smart meter savings wouldn’t result in decreased rates, but would merely reduce the rate of increase.

“In a general rate change proceeding, rates are established to recover nearly all of NV Energy’s non-fuel and purchased power costs (e.g., labor costs, depreciation, income taxes),” said Peter Kostes, PUCN public information officer, in an e-mail. “Depending on how these other costs have changed, smart meter savings may not decrease rates but may reduce any increase sought by NV Energy.”

At the PUCN’s request, NV Energy proposed four “opt-out” options for ratepayers who didn’t want the new smart meters installed. The four options vary from the old analog meter to digital readers with limited transmissions. Ratepayers would pay a premium for these options, leaving many to question where exactly they’ll see any savings.

“A lot of their projections are hypothetical and depend on a lot of ‘if’s’,” said Angel De Fazio, a Las Vegas resident and founder of the Nevada chapter of the Stop Smart Meters group. “They tried to get away [with installing smart meters] undetected, but we’re going to keep them honest.”

Critics such as De Fazio also challenge whether NV Energy has the right to force ratepayers to switch to the smart meters. NRS 704.773, for example, states utility companies should “offer net metering” to customers but does not mandate utilities to switch every meter.

At the federal level, the 2005 Energy Policy Act allows state utility commissions to establish a regulatory framework for smart meters but does not mandate them.

NV Energy acknowledged the program isn’t “driven by any state or federal law” but is rather the company’s attempt to “improve the state’s energy infrastructure, enhance customer service capabilities and upgrade operations.”

Hazard thinks the company should allow ratepayers to “opt-in” to the meters, as opposed to the currently proposed “opt-out” policies.

“[NV Energy officials] never really gave us a choice. They just decided they were going to swap out the old meters and that was it,” Hazard said. “The only reason they’re adding these new meters is because they want the federal money attached to the project.”

Anti-smart meter sentiment isn’t exclusive to Nevada. In Florida, U.S. Rep. Bill Posey, a Republican, wrote one of his constituents that federal law allows consumers to opt-out of smart meter programs. In California, public outcry led nearly 50 municipalities to pass symbolic “bans” against the installation of smart meters.

The California municipalities, however, don’t have legal authority to genuinely ban smart meters — that power resides with the state’s public utilities commission. The votes were a show of support for their citizens.

“Hearing the testimonials of affected persons and the assertion of the right to not have to own a smart meter led us to really advocate on their behalf,” said Greg Caput, a Santa Cruz County supervisor. “Our voices have done much to force [state energy company PG&E] to make additional accommodations, although in our opinion, they certainly haven’t made enough accommodations yet.”

Caput added the Santa Cruz County’s Board of Supervisors recently voted to extend the county’s smart meter ban through 2013.

Erik Pappa, Clark County communications director, told Nevada Journal the county commission hasn’t considered a ban, deferring to PUCN authority.

Every opt-out plan that the PUCN will consider on Wednesday charges additional rates. For example, NV Energy’s “preferred” opt-out plan, Alternative C in the docket draft, would install a non-communicating meter for $109.93 and tack an additional monthly charge of $14.08 onto ratepayers’ bills.

“If this is approved, [PUCN and NV Energy] are basically punishing us each month,” said Hazard. “If some people want the new meters, they can have them, but we shouldn’t be charged to opt-out of something we aren’t forced to have in the first place.”

According to the PUCN’s Kostes, PUCN commissioners cannot currently answer specific questions about the case, such as whether they’d consider lowering the monthly charge of the opt-out proposal.

That, he said, is because the smart meter case is listed as “ongoing.” NV Energy also wouldn’t comment on its proposals because the proposals are still in an un-finalized “draft” format.

Wednesday’s hearing begins at 9:30 a.m. at the PUCN’s Carson City office. It will be simulcast to the hearing room of the PUCN office in Las Vegas at 9075 West Diablo Drive.

Kyle Gillis is an investigative reporter for Nevada Journal, a publication of the Nevada Policy Research Institute. For more in-depth reporting, visit http://nevadajournal.com/ and http://npri.org/.

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