ROI of Smart Meters, A Dumb Idea?

WSJ asked a good question on whether Smart meters are a dumb idea.  Why is this potentially dumb?  Because a utilities and politicians are making an ROI decision without any data to support their decision for smart meters, and almost no one is transparent as to the cost and energy savings.

Smart Meter, Dumb Idea?

New devices promise to cut energy use by giving consumers more information. Critics say they aren't worth the cost.


Not everyone thinks smart meters are such a smart use of money.

Utilities are spending billions of dollars outfitting homes and businesses with the devices, which wirelessly send information about electricity use to utility billing departments and could help consumers control energy use.

Proponents of smart meters say that when these meters are teamed up with an in-home display that shows current energy usage, as well as a communicating thermostat and software that harvest and analyze that information, consumers can see how much consumption drives cost -- and will consume less as a result.

There are a few asking the right questions, but they are in the minority.

"What we're most concerned about is that consumers realize real benefits from the meters" from the start, says Michelle Furmanski, general counsel for the Texas House Committee on State Affairs, which is considering legislation that could establish more protections against disconnections.

I run into this situation many times in data centers, and here is a course of action.

Two years ago, Connecticut Light & Power Co. proposed to provide smart meters for all of its 1.2 million customers. "But then we heard from the Connecticut attorney general asking us, why don't you walk before you run?" says Mitch Gross, a spokesman for the utility. "He was concerned about the cost."

As a result, the utility will do a pilot program this summer to test customer acceptance of smart meters and variable pricing. Some 3,000 customers have volunteered, and the utility intends to see whether people cut energy use during times that prices rise. Some consumers will have "energy orbs" in their homes that change color, a visible indication of how prices are changing, as a way to stimulate behavior changes.

Instead of the estimated $255 million cost of a full meter deployment, the test will run $13 million.

The simplest thing to do is think of an ROI for your metering/monitoring system.  Thinking of what you will do with the data when you collect it.  Will you use it in a closed loop feedback?  Or for user awareness on power use?  Can you estimate power consumption based on server activity?

All of these things can be done if you create a lab to evaluate possible metering systems and the ROI.