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Amid a sea of smart meters, new time-of-use rates also are coming

The idea is to provide discounts to customers on their electric bills if they limit power usage during a five-hour peak period each day.

Neil Jackson, lead meter technician with PSEG Long

Neil Jackson, lead meter technician with PSEG Long Island, installs an electricity meter at a home in Melville on Sept. 8, 2017. Photo Credit: Newsday / Steve Pfost

With new smart meters arriving at a quickened pace in homes across the region this year, PSEG Long Island is preparing a plan that puts the advanced devices to use in helping customers better understand their usage and even shift electric demand to off-peak times to cut their bills.

PSEG officials last week outlined plans to be contained with a new filing with the state Department of Public Service this summer that is expected to include more flexible time-of-use rates that let customers reduce their bills by limiting their energy use during peak hours. There also will be a new rate for customers with electric vehicles, a plan for customers with electric storage batteries in their homes to be paid if they allow the utility to draw the battery power during peak times, and a plan to use larger batteries to relieve demand in two constrained districts. (PSEG has already installed big batteries on the East End to relieve summer demand pressures.) The proposals require state approval. 

Smart meters wirelessly send customer usage data to PSEG every 15 minutes, allowing the company to avoid estimated meter reads and gain insight into which rates may benefit customers. In a yearlong review of 10,000 North Bellmore customers in a new energy-saving program called SuperSaver, PSEG found around half could reduce their bills with a time-of-use rate, and that around 400 could cut bills by 5 percent to 12 percent, said Mike Voltz, PSEG’s director of energy efficiency and renewables. 

Under the current time-of-use residential rate, customers in summer weekdays are offered incentives to shift the bulk of their usage to a 19-hour off-peak time through a discounted rate of 15 cents a kilowatt hour (compared with a standard 18 cents to 20 cents). To dissuade these customers from too much use during the summer peak, their weekday peak-time rate (from 2 to 7 p.m.) is more than double the normal rate, at 47 cents a kilowatt hour. Weekend rates for these customers are 15 cents a kilowatt hour year round. In winter, weekday peak-time rate drops from 47 cents to 23 cents a kWh.

In the new filing, PSEG will propose shortening the peak-pricing period to four and even three hours each weekday (weekends are off-peak), and letting customers choose among periods of day for the peak, Voltz said. In the past, customers have eschewed time-of-use rates because the peak period was too long, he said.

While PSEG doesn’t yet have enough smart-meter penetration to do the analysis for its entire 1.1 million customers, Voltz said the North Bellmore project could extrapolate to similar savings for upward of 40,000 customers across the system. Next year, Voltz said, PSEG plans to have an online tool that will let customers analyze whether a time-of-use rate would save them money given their usage, and to make the switch on their own on the website.

Rick Walden, PSEG’s vice president of customer services, who is leading the smart-meter transition, said advantages of the meters extend well beyond time-of-use rate savings. With smart meters, customers usage is metered every 15 minutes compared with meter reads once every two months — eliminating the need for estimated bills for smart-meter customers. The new meters provide the utility with a deluge of data to isolate outages and other potential problems, remotely turn on or off service, and send customers alerts when usage spikes.

A current meter-reading force of about 150 will be reduced to just a handful over the next 48 months, Walden said, but the company is working with the International Brotherhood of Electrical Workers Local 1049 union so that there are no layoffs. 

PSEG this year has installed 103,364 smart meters, with much of the focus on the East End and the Rockaways, bringing the total at April's end to 232,000, including 2018 and prior-year installations. 

The company is working slightly ahead of its plan to install some 250,000 smart meters a year, finishing in 2022. That has meant marshaling a workforce of 35 workers who can install 40 meters each a day. Some 40 percent of the service territory, or more than 370,000, will be installed by year's end.

Not everyone is a willing customer. Thus far, 0.77 percent of customers, or 1,316, have opted not to have a smart meter — a decision that triggers a $10-per-month charge for a manual meter read. Most customers who opt out are concerned about potential health issues relating to radio signals from the meters, but other concerns include privacy, accuracy and fire safety.

Walden said the Shinnecock Indian Nation at one point rejected smart meters on 300 homes on the tribe’s Southampton reservation, but a company representative working with tribal leaders was able to resolve the concern, he said.

Joseph Rinaldi of Wading River said he would be among those opting out when the new meters were installed in his neighborhood later this year. He has concerns about the potential health effects. PSEG says the health concerns are unfounded.

The utility has entertained the prospect of allowing Rinaldi to call in his own meter reading, he said, but told him it will still charge the $10 reading fee. Spokesman David Gaier said that's because the utility still has "myriad" costs associated with manual meter reads. 

"We encourage customer adoption of [smart] meters because of the many benefits they receive, including automatically notifying us in case of an outage, and confirming that service has been restored," he said. 

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