Thursday, August 30, 2018

PSC rejects KU's plan to install 'smart' electric meters

"Smart" electric meters won't be coming to Midway anytime soon. This morning, the state Public Service Commission rejected a proposal by Kentucky Utilities Co. to deploy the meters and associated technology throughout its service area.

Smart meters are connected by radio to a network, "transmit usage data in real time and also can transmit information about power outages and other unusual events, such as tampering," a PSC news release says. "Advanced meters have the ability to record usage in small time increments. KU and LG&E stated that customers would be able to use the more detailed information to better manage energy costs."

The City of Midway uses water meters with radio transmitters, but a meter reader must be in the near vicinity of the meter to read it, unlike the meters KU proposed.

The PSC's order said it “sees benefits in advanced metering,” but KU and its sister firm, Louisville Gas & Electric Co., had “failed to provide sufficient evidence to persuade us that the … benefits of the AMS (Advanced Metering System) proposal outweigh the costs here.”

"The KU/LG&E application was denied without prejudice, meaning that the utilities may submit a similar plan in the future," the news release said.

KU estimated that the new meter system would cost it $146.7 million, plus $15.2 million for deployment, but would save money in the long run, improve reliability of the electric system and reduce losses from malfunctions and theft of service. However, the PSC cited several inconsistencies in KU's arguments, including conflicting calculations of savings and differing projections of the expected service life of the meters. "The utilities ultimately contended that the meters would last 20 years, but produced minimal evidence in support of that claim," the PSC release said.

The PSC also said that unlike other utilities it has allowed to install smart meters, KU didn't show that the meters were needed to ensure adequate service. In fact, KU and LG&E said their existing meters have an average remaining service life of 15 years or more. "Other utilities demonstrated that their current meters were obsolete and could not be properly maintained," the release said. "Given that customers were being asked to pay for both the new system and $52.9 million in unrecovered costs of the existing meters, KU and LG&E could not prove that their proposal was a reasonable least-cost option, as required by law."

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