LG&E logoLouisville Gas and Electric and Kentucky Utilities are making a big push for smart meters in a proposal to spend $2.2 billion on system upgrades.

LG&E told IL that the meters would allow consumers to learn about their energy use patterns and use that information to choose programs and offerings that are “most ideal for them to better manage their energy use.”

The proposal has an upfront cost to customers, though. The utilities have requested a rate hike: an average residential electric customer of LG&E would pay $9.65 more a month; a gas customer would pay $2.99 more. KU residential customers would see an increase of $7.16.

Over the life of the smart meters, customers “will see a benefit of nearly $1 billion,” the utilities promised.

However, those savings will be far less than the proposed rate hike will add to consumers’ bills: The utilities have 1.3 million customers, meaning each consumer would, over the lifespan of the smart meter, which LG&E said is 20 years, save an average $769 — or $3.20 per month.

LG&E told IL that it will provide more details about its proposal when it files its rate request late this month. At that point, the Public Service Commission, the agency that regulates more than 1,500 gas, water, sewer, electric and telecommunication utilities in Kentucky, has 10 months to render a decision. LG&E said it expects the higher rates to go into effect in July.

Andrew Melnykovych, the commission’s spokesman, said that consumers will be able to submit written comments about the proposal by mail, in person or by email. The PLC also will host public meetings, probably in late winter or early spring to seek public input. Melnykovych told IL via email that he expects one of those meetings to take place in Louisville.

The commission in April completed a review of the use of smart grid technology and decided to give utilities “considerable flexibility in deciding how to deploy the advanced systems.”

Smart meter concerns

The commission said smart meters elicited more public comments than any other issue, with people raising concerns that the devices “transmit dangerous levels of radiation and represent a potential invasion of privacy by utilities.”

The Food and Drug Administration and the National Institutes of Health said that no research shows that the radiofrequency energy that is released by smart meters causes cancer. The American Cancer Society says that the International Agency for Research on Cancer has classified RF radiation as a possible carcinogen and that “it is possible that smart meters could increase cancer risk.” However, the FDA said that the IARC’s classification means that the agency, which is part of the World Health Organization, believes that “there is limited evidence showing radiofrequency carcinogenicity in humans.” For perspective, the FDA pointed out that the IARC classification of the carcinogenicity of RF radiation is the same as its classification for coffee.

A smart meter. | Courtesy of PPL.

A smart meter. | Courtesy of PPL.

LG&E also told IL that it places “the utmost importance on protecting our customers’ safety and security. We have stringent practices in place to protect the energy usage information of our customers.”

While the PCS opposes allowing consumers to opt out of smart meters, it nevertheless said utilities could, if they wish, develop programs to allow their customers to refuse three types of meters:

  • Digital meters: these simply use a digital readout rather than the dials used in older analog meters. They do not necessarily allow data transmission.
  • AMR (automated meter reading) meters: these transmit data on the meter reading at any point in time, allowing them to be read remotely.
  • AMI (advanced metering infrastructure) meters: also known as smart meters, these devices transmit data about usage, but can receive data such as pricing that varies with time or total system demand. They also can be used by utilities to precisely determine the location of power disruptions and to monitor their systems more closely for other types of problems.

The PCS said that smart grid tech is critical “to the implementation of what is known as ‘dynamic pricing,’ which bases the cost of electricity on the time of usage and overall electric demand.”