Commission denies smart meter rollout, insufficient evidence to justify expense


The Kentucky Public Service Commission (PSC) has rejected a proposal by the Kentucky Utilities Co. (KU) and Louisville Gas & Electric. Co. (LG&E) to deploy smart meters and associated technology throughout their systems.

In an order, the PSC stated that, although it “sees benefits in advanced metering,” the two utilities had “failed to provide sufficient evidence to persuade us that the … benefits of the AMS (Advanced Metering System) proposal outweigh the costs here.”

The KU/LG&E application was denied without prejudice, meaning that the utilities may submit a similar plan in the future.

KU proposed to replace about 531,000 electric meters, while LG&E proposed to replace about 413,000 electric meters and to retrofit about 334,000 natural gas meters.

The utilities estimated that the total capital cost of the new meter systems would be $165.2 million for LG&E – $103.7 million for electric and $61.5 million for natural gas – and $146.7 million for KU. The cost to deploy the new meters would have been an additional $13.3 million for LG&E and $15.2 million for KU.

Advanced meters have a radio transmitter that connects to a central communication network. The meters can transmit usage data in real time and also can transmit information about power outages and other unusual events, such as tampering.

As the meters are read remotely, the utilities contended that the meters would produce net savings by reducing the cost of meter reading. The utilities also stated that the meters would improve system reliability and reduce losses from system malfunctions and theft of service.

Advanced meters have the ability to record usage in small time increments. KU and LG&E
stated that customers would be able to use the more detailed information to better manage energy costs.

In rejecting the application, the PSC cited several inconsistencies in the case presented by the utilities, including conflicting calculations of net savings and differing projections of the expected service life of the advanced meters.

Click here for further application details.