Smart meter cost discrepancy?

Mark Brooky • Jul 21, 2015 at 12:39 PM

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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