Environment
5:24 pm
Mon October 1, 2012

Public Service Commission to Study Smart Grid Technology

The Kentucky Public Service Commission will begin a study of smart grid technology, and whether the devices will help electric consumers.

The term “smart grid” is used to refer to technology like smart meters, and other equipment that helps utilities monitor electricity and detect outages. PSC spokesman Andrew Melnykovych says the tools can be useful for consumers, too.

“Smart grid technology enables the use of dynamic pricing, which ties the cost of power to the time of day that it is used and to the overall demand on the system,” he said. “Customers can use the technology to monitor pricing and alter their usage accordingly.”

This order marks the third time since 2006 the PSC has studied smart grids. The commissioners plan to look at all the issues related to implementing the technology, including implementation cost and whether the devices would encourage energy efficiency.

Opinions on smart meters nationwide are mixed. Many environmental groups have embraced them, as a way to improve energy efficiency, and they’re supported by lobbyists and special interest groups. But some say there are concerns about privacy and health effects. Consumers Digest concluded in 2011 that the devices may not deliver on the cost savings they've promised.

A few experts suggest that smart-meter conversion represents little more than a boondoggle that is being foisted on consumers by the politically influential companies that make the hardware and software that are required for the smart-meter conversion. And based on our investigation, it’s difficult to disagree.

NPR’s Planet Money team also looked at the issue in 2010, and spoke with a behavioral economist who argued smart meters may cause people to use more electricity. “Electricity is really amazingly cheap. It's amazingly cheap to air-condition your whole house for a few hours,” said George Lowenstein of Carnegie Mellon. “And if the smart meter is giving you objective information about how much it's costing you, you might be surprised at how cheap it is rather than surprised at how expensive it is.”

There’s no timeline yet for the Kentucky Public Service Commission’s study of the issue. All the major electric utilities in Kentucky—including Louisville Gas and Electric—are automatically parties to the case, and will be required to provide information to the PSC.