Texas Energy
3:27 pm
Thu August 7, 2014

State struggles to launch energy efficiency program

About five years ago, Texas regulators ordered the three largest electric transmission providers – Oncor, CenterPoint and AEP Texas – to budget $18.5 million for a program that would provide poor Texans with “home and business area networks” (HAN), tools to help them interact with "smart" meters installed at their homes.

Credit State Impact Texas

But that money has yet to be spent, and the program, which was intended to improve energy efficiency among folks who struggle the most to pay their electricity bills, is stuck in a bureaucratic limbo with no end in sight.

That failure to launch rankles consumer advocates who say poor Texans have borne the costs of the state’s rollout of 7 million home “smart” meters without realizing all of the benefits. They add that the delay exemplifies lingering challenges for Texas – considered a national leader in smart grid technology – as it seeks to further bolster its infrastructure.

“This is a lot of money, and it should be used by now,” said Carol Biedrzycki, executive director of Texas Ratepayers’ Organization to Save Energy.

The utilities, which were instructed to work together on a proposal to present to the Public Utility Commission, have struggled to agree on details. Meanwhile, low-income Texans are among those across the state paying monthly surcharges for smart meters they may not fully use.

Terry Hadley, a spokesman for the commission, called consumer advocates' concerns “legitimate,” but said the long process would yield a better program – whenever it is finished. “Yes, it is taking longer," he said, "but we believe it will result in a more coordinated and effective system and a better customer experience.”

Smart meters, which utilities can read remotely, record power-usage data almost instantly, enabling utilities to respond faster to outages. They also help consumers track their own electricity habits and, in theory, save money.

Since the passage of a 2007 state law urging that the smart meters "be deployed as rapidly as possible" across the state, Texas has spent more than $2.5 billion installing the meters in an effort that's nearly finished. Funding came from a mix of federal grants and fees between $2 and $3 tacked on to Texans' utility bills.

Most folks with those meters can check their energy usage online, typically with a 24- to 48-hour delay. According to the state's latest tally, about 12,000 smart meters are hooked up to HAN devices – high-tech thermostats or other home displays that allow users to view data closer to real time and control individual appliances. Today, those devices can cost less than $100.

In 2008 and 2009, the PUC had ordered CenterPoint to set aside $7.5 million for the program, while Oncor and AEP Texas would pay $10 million and $1 million, respectively. Consumer advocates pushed for those requirements amid concerns that poor Texans would be among those paying surcharges for the meters, even if they lacked steady internet connections or money to purchase in-home networks themselves.

“Here is a chance for them to take control and know how much their electric bill is going to be,” Chris Schein, an Oncor spokesman, said this week, touting the program’s merits.

A PUC PowerPoint presentation from 2010 said the transmission providers would “use its best efforts” to finalize the plan by December 2011. “The goal of the program is to maximize the comprehensive, cost-effective distribution of the in-home devices, including training and education, to the greatest number of low-income customers,” the presentation said.

Going on three years later, that has yet to happen. The utilities and other groups weighing in on the plan have struggled to find consensus on a number of issues, including which consumers should qualify for the program, which company's technology should be used and how to handle data privacy concerns, the utilities say.

“There appears to be a lot of questions. More questions than answers,” said Leticia Lowe, spokeswoman for CenterPoint.

The utilities say the process been slowed by the involvement of a large number of parties involved and the difficulties of evaluating changing technology. The companies say they understand criticism about the delay, but point out that low-income folks benefit from smart meters even if they can’t monitor their energy usage. The meters allow utilities to quickly diagnose outages and switch power on and off without sending technicians. That has drastically reduced fees for switching power on and off.

Between 2007 and 2014, for instance, Oncor slashed its typical account activation and cancellation fees from $18 to $2.26, the company says.

But it's not clear when poor Texans will receive the devices, or if the utilities will ask to use the money to help them in other ways. Hadley said the agency had no timeline for signing off on the program.

In March 2012, the utilities invited manufacturers to submit proposals for devices that the program might use, but they never picked a company to work with.

Steve Brightman, co-founder of Southwest Energy Smarts, a Dallas-based company that services manufacturers (including one that sent in a proposal) and other companies, said he and other industry members are frustrated that the program seems to have fizzled.

“We’re still eagerly awaiting some public announcement," he said. "I cannot imagine working on an $18 million program and not having a timetable."

The low-income program's troubles have probably slowed the rollout of in-home networks elsewhere in Texas, Brightman added, because providers have viewed the program as a test case for certain technologies.

Doug Lewin, executive director of the South-Central Partnership for Energy Efficiency as a Resource (SPEER), based in Austin, said the program is one of several reasons for concern that Texas is letting its foot off the accelerator when it comes to making its grid “smarter.”

“Lots of people in other states would be thrilled to have what we have here,” he said. “But there is definitely a potential for going off the rails, and losing track.”

Last year the Washington, D.C.-based GridWise Alliance ranked Texas first (tied with California) on its “Grid Modernization Index,” citing the smart meter efforts. But questions remain about how many Texans are fully using the meters. Less than 1 percent of Texans have ever logged into the state’s online portal to view their data (though some are viewing the data through other means), and major utilities have decreased spending on smart grid education, SPEER found in a recent report.

“It’s almost like you’ve got the iTunes and the Google Play store,” Lewin said, “but you don’t have any apps.”

Disclosure: CenterPoint Energy is a corporate sponsor of The Texas Tribune. Oncor was a corporate sponsor of the Tribune in 2012. A complete list of Texas Tribune donors and sponsors can be viewed here.

This article originally appeared in The Texas Tribune at http://www.texastribune.org/2014/08/07/state-struggles-construct-energy-efficiency-progra/.