Rising energy risks smart meters' promise

Smart meters are being touted as the best way for energy-users to monitor their behaviour and find ways to cut consumption and electricity bills. But as energy prices keep going up, meters might more likely be a cost-increase minimiser than an expense reducer.

That could leave some utility customers even less thrilled about smart meters than they already are. Right now, opponents of new meters are focused mostly on perceived threats to privacy, security and health. Imagine their reaction if they’re told, “OK, smart meters might not save you money on your electricity bills in years to come, but maybe they’ll help you limit your expense increases to the single digits rather than the double digits.”

Try selling that message to an already sceptical consumer.

Unfortunately, that’s the challenge utility companies will have to face up to. Considering the difficulties they’re already having in persuading customers about the benefits of smarter technologies, utilities will need much better communication and education strategies down the road.

A recent report from Consumer Focus, a UK-based consumer advocacy organisation, for example, found customers have “high levels of distrust of energy suppliers.” Some of that stems from already weak customer relationships or from the failure of utilities to adequately explain how the energy market and various pricing schemes work. However, recent increases in energy costs have also contributed to the problem.

Utility companies eyeing smart-grid upgrades or trying to preach conservation to customers need to take heed of such findings.

“The lack of trust in the relationship with consumers may also have served to undermine the authority and neutrality of the energy supplier to communicate with the consumer on matters of energy efficiency and the encouragement of beneficial behaviour change,” stated the report, “Informing choices: Consumer views of energy bills.” “Consumers blame the suppliers and the government for high and increasing prices and refuse to accept that the only solution is for them to modify their own behaviour.”

Even worse, customers who are being made to feel wasteful or guilty for not conserving more could end up being even more resistant to future campaigns by utilities to get them to cut back on energy use.

“The price of energy’s gone up so much in the last year, consumers are having a hard time,” agreed Tara McGeehan, utilities director at business and technology services firm Logica. “There’s a general lack of trust.”

However, McGeehan added, pointing the finger solely at utilities isn’t completely fair. In the UK, for example, utility companies are forced to deal with the impacts of rising energy costs while at the same time being mandated by the government to encourage customers to use less energy through a universal rollout of smart meters. Such a mandate, essentially, expects utilities to tell their customers to buy less of what it is they’re selling … not exactly the standard business model.

“They don’t benefit from us using less energy,” McGeehan said. “It’s not really incentivised.”

The responsibility for providing that incentive falls at the feet of government, which also hasn’t done as well as it should at promoting its future vision of energy. From the utilities’ perspective, McGeehan said, what government needs to do most is encourage the development of more green energy, so the energy they’re selling doesn’t have the negative consequences it does today. And for the end-users of energy, government’s top priority should be “putting the foot on the pedal and getting smart metering out” as quickly as possible.

Just as dieters without scales can’t effectively judge how successful their new eating habits are, energy users without better insights into their consumption patterns won’t know where they can best cut their expenses. Smart meters will help in that regard. So too could better information about which energy-using appliances — fridges, TVs, water heaters, etc. — are the hungriest.

Ultimately, both energy companies and government will need to convince customers that their cooperation is needed to keep the lights on (and at an affordable cost) in the years ahead. Because no matter how you look at the energy problem and its possible solutions — less consumption, more green energy, new nuclear plants, commercial-ready carbon capture and storage — one fact will remain: consumers are the ones who’ll be paying for it all in the end.