Smart Meters Alone Can’t Fix Our Problems: Why We Need a New Approach to Consumption Data

During my 30 years in the power industry, including as a state public service commissioner, five years as a FERC commissioner, president of NARUC, and chair of PG&E’s board, I’ve recognized the value and importance of data, and how the need for it has grown over those three decades with increasing stress on our grid from growing demand and a transition to a decarbonized energy system. While society has increasingly digitized, giving people data-driven tools that support making decisions that are better for themselves, their finances, and their health, the grid remains without any true sense of real time performance or safety metrics. I can go for a walk and my phone can tell me precisely how many steps I’ve taken, but utilities are left with a “best guess” as to how many EVs are plugged in at once.

The energy transition is accelerating globally in response to a warming planet. Beyond just adopting more renewable energy sources, however, there’s also a clear need to better monitor and manage the overall consumption of electricity and natural gas. In the age of increasing electrification—homes, businesses, and industrial facilities replacing fossil fuels with electricity as direct energy sources—we need more and better data to support customer-centric load flexibility. Whether capturing time-of-use data from the surging demand of new EV owners, understanding what the impact will be of heating electrification on both the electric and gas systems, or accessing real-time peak usage data to support load flexibility, timely and granular consumption data is more essential than ever. On the customer side, it’s also time to finally ensure that everyone—especially people in disadvantaged communities and low-to-moderate income (LMI) consumers—are equitably empowered with timely information and insights to make more effective choices and have increased certainty about their utility use and what it’s costing them. Simply put, better data helps utilities plan better and better serve their customers.

To enable improved demand management and more deeply engage utility customers as partners in a transformation to a cleaner, more efficient world, electric and gas utilities need timely access to granular consumption data. To that end, and to streamline operations, utilities have collectively invested billions of dollars in replacing traditional analog meters with automated meter reading (AMR) and advanced meter infrastructure (AMI) meters that transmit granular usage data directly to the utility. The scale of this upgrade has been enormous: according to the U.S. Energy Information Administration, U.S. electric utilities reached roughly 119 million AMI installations as of 2022, equal to about 72% of all electric meters (or 88% of residential customers). Despite significant market penetration, however, AMI and AMR have yielded few practical benefits for end-use customers. In fact, although these installations have helped utilities reduce their operating costs and risks by eliminating the need for manual meter reading and reducing the number of truck rolls required for service calls, the costs of meter upgrades (as well as subsequent maintenance of the network used to transmit meter data to the utility) have typically fallen on customers, contributing to higher rates and resulting monthly bills. While seeing a utility employee walking through one’s yard to the meter on the side of the house may be a thing of the past, the majority of customers today are comfortable with—and in fact are demanding—a much more interactive, digital and mobile experience with their utilities, one they’ve had for more than two decades for shopping, food and grocery delivery, travel, financial services, entertainment, social contact, and instant access to information, among others. There’s no reason they shouldn’t have it with the commodities that are essential to modern life.

Unfortunately, meter technology has historically been stuck in an outdated framework where utilities sold essential services to “ratepayers” with a focus on one-way communications. Customer-facing benefits—although nice to have in theory—were not seen as mission-critical, particularly when compared with more-streamlined utility operations. As a result, despite efforts like Green Button (which aimed to provide customers with increased transparency into their electricity consumption) and a growing focus from many utilities on rolling out new time-of-use rate structures, most consumers across the U.S. still lack basic access to timely consumption data that would help them make more informed decisions about their consumption. It’s no surprise that early generations of smart meters were widely viewed with suspicion and distrust by customers: utilities talked enthusiastically about how much more data and visibility smart meters would generate into people’s personal energy-consuming activities, all while the customers themselves didn’t see much, if any, benefit.

The latest generation of smart meters—sometimes called AMI 2.0—aims to solve some of the problems typically associated with the technology, particularly with regards to customer engagement and management of distributed energy resources (DERs). The problem is that they still often use proprietary elements in their communications networks that can effectively lock utilities into single-vendor ecosystems, and the new meters are adding a tremendous amount of computing power into each meter for the nominal goal of providing “grid-edge” analysis. And while some customers may potentially be able to access more timely data, utilities in many cases still won’t be able to access data across their territory until the next day. Collectively, these problems mean that new meter hardware may not be able to meet current—much less emerging—grid needs during the energy transition; is continually becoming more expensive and contributing to higher rates; features hardware that may become obsolete over the proposed nearly 20-year meter useful life; and may create bottlenecks to innovation as a

result of the proprietary approaches used. Simply put, it may be better than nothing, but it’s not the solution we need now.

There is a better way: AMx, a strategic approach to utility consumption data that uses modern technology to quickly unlock new insight and value from existing infrastructure investments (whether AMR or AMI). This approach enables utilities to take a more moderate, technology-agnostic approach to meter replacements while deploying whatever technology or vendor is best able to meet their goals, and it prioritizes analyzing data in the cloud rather than in the meter to keep costs down and support continuous innovation. Perhaps more importantly, it allows customers to finally get the long-touted benefits of timely, granular consumption data without having to wait for years as new hardware is deployed.

It’s past time to get the promised benefits of granular, near-real-time data while equitably engaging customers and helping them become collaborators in the energy transition by providing them with personalized and actionable insights in the moments that matter most. I believe AMx is the most promising—and pragmatic—way to get there quickly and at the lowest cost, and I look forward to seeing more utilities explore it as a way to help meet a growing range of challenging yet critical goals.