Washington, DC, U.S.A. --- (METERING.COM) --- July 28, 2011 - For a wide variety of utilities under a range of realistic assumptions, the customer and utility benefits of investing in digital smart meters and associated energy management technologies will outweigh the costs, according to a new white paper from the the Institute for Electric Efficiency (IEE).
The paper “The Costs and Benefits of Smart Meters for Residential Customers,” which was prepared by the Brattle Group, quantifies three categories of benefits from AMI – operational, customer, and societal – and estimates these benefits for four prototypical utility types – “pioneer,” “committed,” “exploratory,” and “cautious.”
Based on assumptions of one million customers within the service area and AMI phased in gradually over a five-year time horizon, with a web portal for feedback as well as a choice of price plans, the total costs range from a low of $198 million for the pioneer utility to a high of $272 million for the committed utility, while the net benefits range from a low of $21 million for the committed utility to a high of $64 million for the exploratory utility.
Specifically the operational savings (resulting from avoided metering costs, automated outage detection, and remote connections) range from a low of $77 million for the pioneer utility to a high of $208 million for the cautious utility, and the consumer-driven savings (resulting from energy pricing programs, in-home enabling technologies, and energy information) range from a low of $100 million for the cautious utility to a high of $150 million for the pioneer utility.
“Although specific results will vary by utility, our study found that even with conservative assumptions regarding consumer engagement in technology, programs, and rate plans, utilities and their customers can expect positive net benefits from their AMI investment over the next 20 years,” commented Lisa Wood, IEE Executive Director.
The analysis also showed that the strategy with the potential to achieve the greatest consumer-driven benefit is to focus on accelerating electric vehicle (EV) adoption. The benefits of EVs created a disproportionately high share of the overall consumer driven savings, indicating that even modest increases in EV adoption will have a large impact on benefits.