Smart meters still a smart investment, says Fitch


New York, NY, U.S.A. — (METERING.COM) — July 3, 2013 – Smart meters are still a smart investment and are foreseen to play a key role in federal and state regulatory and energy policymaking, future retail rate design, and system reliability standards, according to the global rating agency, Fitch Ratings.

In a new report, “Smart Meters Are Still a Smart Investment,” the agency says it believes the large investment over the last few years by U.S. utilities in smart meters will pay increasing dividends in cost savings, service reliability, demand side management, and energy efficiency.

Smart meters play an active role in day-to-day utility operations providing automatic meter reading, service connection or disconnection capability, and immediate service interruption notification. Moreover, smart meters are a cornerstone in demand response and energy efficiency programs, and help support the installation of distributed generation. As the energy efficiency programs mature and distributed generation gains wider acceptance, smart meters are then expected to play an increasingly integral role in retail rate design.

The report notes that the economics for demand side management programs are compelling, in that they can be the most efficient and lowest cost alternative for utilities to meet peak load demand in lieu of building new generation. However, data presented on the 10 largest demand side management programs in 2011 shows that the cost effectiveness can vary significantly, from as low as $94/kWh in the case of Florida Power & Light to over $1,000/kWh at New York Power Authority and Baltimore Gas & Electric.

The report also notes that utility cooperatives are the largest users of residential load management programs as a percentage of total residential sales, and also have achieved the greater savings when compared as a percentage of load.