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Private firms dispute cost of `smart' meters

Energy board estimate of $600 per unit too high, they say
Province targets lower costs through timely use of electricity

Toronto Star - October 30, 2004
by John Spears

An estimate that sophisticated new electricity meters proposed for Ontario homes and small businesses will cost $600 each is exaggerated, according to companies working with the technology.

In fact, some new "smart meters" cost under $200, not including installation, says Constantine Eliadis of Ozz Corp.

And that price might well come down if Ontario proceeds with its plans to install more than 3.8 million new meters by 2010, Eliadis said.

"The technology is evolving very, very quickly," said Eliadis. Ozz designs systems that use smart meters, and provides meter reading services to utilities.

He was reacting to an estimate by an Ontario Energy Board working group that smart meters are likely to cost $600 each — a price that would push the total bill for re-equipping the province's homes and small businesses to $2.3 billion.

Jack Robertson, vice-president of Elster Metering in Burlington, said interval meters can cost as little as $100 each. While that cost might double by the time the meter is installed and connected to the local utility, the total cost would still be far less than the working group's estimate, he said.

Elster is installing new meter systems in Newmarket. The $600 per meter estimate is based on traditional meter designs used by most utilities, he said. "Because they've never been exposed to some of these new technologies, they have misinformation," Robertson said.

Most meters in use today measure the total amount of power used between meter readings, which are generally taken every month or two. "Smart meters" can track power use hour by hour, or even every 15 minutes. That allows utilities to charge more for power used when demand is high, the system is under stress, and generators are charging high prices to produce power.

Utilities can also reward customers by charging low prices if they use power at off-peak times when the price paid to generators is much lower.

If enough customers avoid using power during peak periods to escape the high prices, then fewer generating stations are needed.

In theory, the cost of installing new meters can be less than the cost of building expensive new generators. Energy minister Dwight Duncan has argued that the savings will outweigh the costs of the new meters.

A variation on smart meters are less sophisticated "time of use" meters. They can't give an hour-by-hour readout but are able to divide the day into as many as six periods. Utilities can then set different rates for each period, but the rates must be set in advance, and can only be adjusted every few months. They can't track daily market changes.

Time of use meters are cheaper than interval meters, which are often linked to local utilities through a telephone, Internet or wireless connection. But the more sophisticated interval meters can do more. Eliadis said some systems can transmit three streams of data: One meter can track electricity, water and natural gas use, and send the data to each of the three utilities. That spreads the cost of the meter over a larger base.

Vigorous debate is taking place between proponents of each type of meter, Eliadis said: "There seem to be two pretty polarized camps."

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