Do you remember where were you were and what you were doing the day the first iPhone was released? What about the moment when Senator Obama became a real contender for the White House? It is rare to experience a pivotal moment in history, and appreciate its significance in real time.
Last week, the New York Public Service Commission (PSC) approved a plan by New York’s largest utility, Consolidated Edison (ConEd), to distribute advanced meters (also known as “smart meters”) to more than 3.2 million electric and 1.2 million gas customers in New York City. Advanced meters, a key component of the smart grid, can unlock the many benefits of clean energy while empowering customers to take charge of their energy use. For me, this move by the PSC was a pivotal moment in New York City’s history.
With this single order, the PSC is doing more than just “talk” about environmental progress; it’s making good on the goals put forward over last two years in Reforming the Energy Vision (REV) – the landmark proceeding to transform New York’s electric grid into a resilient, efficient, smart, clean system. This shows New York State’s commitment to reduce greenhouse gas emission by 40 percent and generate half of its electricity from renewable sources, targets it has declared under the State Energy Plan.
The deployment of advanced meters is a cornerstone that sets the foundation for a future envisioned by REV.
New York currently lags the nation in the use of advanced metering technology. According to the U.S. Energy Information Administration (EIA), less than one percent of electric meters in New York State are advanced, which puts New York far behind states like California (83 percent) and Texas (67 percent). This order will increase the number of advanced meters in New York City by over 40 percent by 2022, a number which will likely escalate as other utilities are poised to follow suit.
Advanced meters are a key component of the smart grid and come with a long list of benefits to utilities and customers. They help utilities operate more efficiently through increased automation, which helps detect power outages faster and reduce operation costs, among other things. Customers benefit from lower electric bills, better access to their own electricity use data, and more choice – like the option to use time-variant-pricing, which incentivizes people to use less electricity during certain periods of peak energy demand. Combined, these efficiencies help reduce electricity use and harmful pollution.
These benefits rest heavily on the ability to record electricity use in short time intervals, and in a manner that is both transparent and accessible to customers and third-parties in the private sector, who provide services. They are essential factors in the development and provision of time-variant-pricing and other electricity pricing options that save energy and money.
As more and more customers use advanced metering technology and enroll in time-variant-pricing, benefits to people, the system, and the environment will increase. Understanding these reasons, the Commission’s order pointed out that “A lesson learned from other jurisdictions is that the failure to deliver clear and apparent customer benefits is a cause of the criticism that surrounds many deployments of [Advanced Metering Infrastructure].” In doing so, it highlighted the benefits of using advanced meters, and emphasized the importance of bringing them to market as quickly as possible.
The order also places a cap on total expenses and provides an option for ConEd to receive incentives if the program is successful and comes in under budget. With this in mind, ConEd is to further expand on its plans to distribute advanced meters through a customer engagement program due later in the year that will include:
- Innovative pricing proposals (including one or more pilot programs developed in consultation with stakeholders)
- A plan to accommodate third-party web platforms and smart phone apps that could, for example, send people recommendations via smart phone about how they can more effectively reduce their energy use and electricity bills
- A proposal to leverage advanced meters to cut customers’ costs for complying with New York City’s benchmarking law (which requires owners of large buildings to annually measure their energy and water use to help with energy efficiency planning)
- A proposal for engaging customers in multifamily residential buildings
Fundamentally, this is a major win for New York. This order unleashes unprecedented opportunities. The use of advanced meters will give customers more control over their electricity use, lead to much needed environmental outcomes, and help facilitate the clean energy transformation New Yorkers so deserve.