Revised `smart meter' program may add to costs
Some in industry fault energy board
New design could stifle competition
Toronto Star - Feb 10, 2005
by John Spears
Ontario's energy regulator has changed the draft rules governing its $1
billion plan to install new electricity meters in every home and business
in the province by 2010.
Now, some utilities and metering companies say the changes will limit the
number of systems that can be used, which could stifle competition from
meter suppliers and drive up costs of the program.
Ontario's Liberal government has decreed that all homes and businesses
must have a "smart meter" by 2010; at least 800,000 must be installed by 2007.
It asked the Ontario Energy Board to draw up an implementation plan, which
the board delivered on Jan. 26 and which now rests with
Ontario Energy Minister Dwight Duncan for final approval.
"Smart meters" can tell a hydro utility how much power a customer is using
every few minutes, or every few hours.
That allows utilities to charge more for power that's used during periods
of high demand. That should encourage consumers to use less power in peak
periods, easing the strain on the province's aging generators.
The Liberals also want utilities to develop systems to flick off
customers' non-essential appliances, such as air conditioners or pool
pumps, for limited periods to ease stress on the system.
That means information has to flow two ways — from the meter to the
utility and from the utility back to the customer.
But some industry players say the energy board has proposed overly
restrictive conditions on how the information must flow back to the customer.
The energy board says the new "smart meters" themselves should be able to
handle two-way signal traffic.
But others say there's no reason why everything has to flow through the
meter: Many systems exist to send information back to the customer's home
or business through a radio, phone or Internet link that bypasses the meter.
Jan Peeters is chief executive of Olameter Inc., a company that uses
equipment from a variety of suppliers to build metering systems for utilities.
He said he's "disappointed" with the new plan.
"If you want to be able to do load control — to control a thermostat or a
pool pump — just say so," said Peeters.
"But don't start specifying that the signalling to the pool pump has to go
through the meter, because you are way out of your depth. Other things are
happening in the communications industry completely outside of anything an
energy regulator can specify."
Specifying that meters must handle two-way signals is a reversal for the
In November, it issued a draft policy on smart meters that said one-way
communication was adequate.
"The board considered requiring two-way communication, but concluded it
eliminated viable systems from contention and could compromise competitive
bidding," it said at the time.
But just before Christmas, the board asked for further comment on the issue.
Then on Jan. 26 it advocated two-way meters. It said they would allow
water- and gas-meter reading capabilities to be added to the electric
meter. And they would also allow add-ons such as "load control" — turning
off air conditioners and other appliances from a central office.
William Rupert of the energy board says the change resulted from responses
to the original plan.
The board decided the scale of the smart meter plan was so broad that the
new equipment should have the maximum capabilities, he said.
"Why would you spend this kind of money and effort to have a system that
was incapable of carrying load-control signals?" he said in an interview.
Nonetheless, the decision surprised firms such as Itron Inc., a big
Spokane-based meter manufacturer that last year bought the electricity
metering business of Schlumberger Ltd.
"They went from a very goals-oriented document to a very prescriptive
document," Scott Owen, vice-president of Itron Canada, said in an interview.
Itron's meters don't by themselves offer two-way communication, but can
operate with other systems to allow information to flow both ways. The
proposed rules seem to limit prospects for Itron.
Paul Ferguson, president of Newmarket Hydro Ltd., is running pilot
projects with meters that have one-way and two-way communication.
He's uneasy with the change in specifications because it will limit his options.
"I don't want to be stuck with one supplier," he said.
Toronto Hydro wrote to the energy board last month saying it "does not
support mandating a two-way communications network for smart metering in Ontario."
While the utility is opposed to a mandated two-way system, senior
vice-president Peter D'Uva said two-way meters do have advantages.
"If we're going to put in a system, we want to put in one that looks
forward," he said. "The two-way (meter) we know looks forward, and the
one-way at this point we're not sure."
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