Smart meter cost discrepancy?

Michelle of Spring Lake asked, "You recently responded to a question about smart meter opt-out costs. I have another question regarding customer savings related to the installation of smart meters."
Mark Brooky
May 22, 2013


Michelle continues: "Per the Michigan Public Service Commission, there needs to be a cost benefit to customers for the installation of the smart meter program to continue. There appears to be very different opinions of what those cost benefits are. I have found three different public sources with three very different values. How can these installations continue when there is such a discrepancy?"


I asked Dennis McKee, who is heading up Consumers Energy's Smart Energy Program, to explain the issue and discrepancy.

"The meter technology upgrade is part of our effort to meet the changing needs and lifestyles of our customers," he said. "As a point of reference, more than 36 million smart meters have been installed nationally. These digital meters provide two-way communication that will help us to provide enhanced service to our customers. ... Smart meters will also help facilitate money-saving programs for our customers, who will have secure web access late this summer to their own energy use information."

McKee said the Michigan Public Service Commission has accepted the business case for the Smart Energy Program, which is projected to yield a financial benefit — and exceed the cost of the program — to Consumers Energy customers.

"Capital project evaluation concepts require calculating costs and comparing long-term values with near-term values," he explained. "As a result, the financial benefit to customers can also be expressed in today's dollars, which is consistent with net present value that is the reference point for the MPSC's evaluation."

McKee said the state attorney general's calculation methods are a departure from the methods used by the Michigan Public Service Commission, creating the discrepancy pointed out by Michelle.

To read the attorney general's opinion of the justification of cost benefits provided by Consumers Energy, dated May 10, download the Related File (PDF) at the bottom of this story.

To read more about the Consumers Energy Smart Energy Program, CLICK HERE.

McKee also offers presentations to local organizations and customer groups interested in the Smart Energy Program. He can be reached at 616-530-4146.

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These are the three actual customer savings noted and where:

1. Mr. Dennis McKee, Communications Director, Smart Energy Program states 1.9 Billion in an mlive article dated 04-29-2013.

2. The Michigan Public Service Commission Staff report of Consumers Energy's Calculation per MPSC rate case U-17087 states $42 Million. However, does this even take into consideration the $75M capital expenditure (10% profit) allowed by the MPSC? and

3. The Attorney Generals Office Calculation per U-17087 of a net loss of $(133.4Million).

Which is it? 1.9 Billion, 42 Million or (133.4)Million

Had the Attorney General's Office been consulted for this question as well, the following statement from U-17087 comment 0296 may have been relayed:

'The Commission should not approve any further capital expenditures proposed by the Company for the AMI Program and order the Company to suspend further development and implementation work on the AMI project until the cost / benefit analysis shows sufficient new value to customers to continue.'

$750M / 1.8M meters = $417 per household to replace a meter that has not completed its life cycle. Then add another $75M for capital improvement profits.

And then to Opt-Out. One will pay for these meters first thru regular fees built into their bill which is what is being debated in U-17087, and then have to pay the one-time Opt-out fee and a monthly opt-out fee.

There is a reason the Attorney General's Office is involved ( There is a reason that Representative McMillin introduced HB 4315 to eliminate opt out fees (



Well, without the algebra and whatever else entails calculating the cost vs savings of a "Smart Meter", here is exactly what I was told by the installer of our new "Smart Meter". Immediate "Opt out" costs nothing, but I will be charged $15 per month for a "Meter Reader Fee". If I change my mind after installation and wish to switch back to a conventional meter, there will be a "one time" $175 fee for the meter change... plus of course the $15 monthly reader fee.

My only question to the meter installer was: Since even the poorest cell phone reception is over 1 mile away from me, how accurate can the wireless "Smart Meter" be? He didn't have much to say. LOL


i asked BLP if they had any plans for the smart meters, they emailed me back and they told me, not anytime soon, still studying the project, the reader fee you mention should not be extra and is built in to the bill you already receive, next thing is they will be telling you, you must use these type of light bulbs in your house or we will charge you a fee for not doing so


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