Smart meter

House Bill 4220 would drive up energy costs in Michigan

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For the last decade, DTE Energy has been installing advanced meter infrastructure (AMI) upgrades to our grid to improve the quality of electric and gas service for our customers. We accelerated installation of advanced meters back in 2009, which helped create jobs and stimulate Michigan’s struggling economy.

Since then, we have installed more than more than 3.1 million advanced meters, more frequently referred to as smart meters. More than 65 million smart meters have been installed across the U.S., and our neighbors in Canada attained 100 percent installation across the country in 2012.

While the vast majority of DTE Energy customers have chosen to embrace the benefits of new metering technology, there is a small – but vocal – minority of individuals who are pushing for legislation that would impede progress across the state.

House Bill 4220 isn’t good policy for Michigan

While 99.7 percent of DTE Energy customers have elected to upgrade to smart meter technology, we give our customers the option to choose whether or not to participate in this program. Customers can opt out of the program for a one-time fee of $67.20, and monthly fee of $9.80, which are set based on costs of maintaining this separate metering and billing system.

Rep. Gary Glenn recently proposed legislation that would remove a utility’s ability to charge these fees – suggesting a $5 monthly fee, half of the current cost. The balance of nearly $5 would be the responsibility of all other customers – including those who have elected to use a more cost-effective meter.

0.3 percent of our total customer base choose to opt-out

Utility rates, including opt-out fees for smart meters, are established through rigorous analysis to reflect the true cost of service. As a result, increases in utility operating costs drive increases in the rates customers pay for their gas and electric service.

DTE Energy has been and continues to be a national and industry leader in controlling operations and maintenance (O&M) costs in order to provide our customers with quality service at the lowest cost possible. From 2007 to 2012, our O&M costs were flat, while peer electric companies’ O&M spending increased an average of 33 percent.

Rep. Glenn’s bill to amend current smart meter regulations would have a technical and very costly impact on utility operations. The estimated cost to DTE customers totals more than 9 million each year.  This raises the cost of electric and gas service in Michigan, while benefiting the interests of less than 0.3 percent of DTE Energy’s customers who opt-out of the AMI program.

Smart Meters are cost efficient, safe, and allow for reliable service

The difference between smart meters and traditional analog meters is simple: smart meters allow wireless communication between the meter and the utility.

This technology started out as a way to eliminate expensive and sometimes intrusive manual meter readings, update decades-old technology, and remotely connect or disconnect service. These basic features save costs to our customers by eliminating the need for costly, in-person manual readings or self-readings on aging, often less-than-accurate infrastructure.

For example, every meter-reading route that is automated with AMI reduces costs by $2,000 per year. Customers also save $12 – 20 dollars each time DTE Energy uses a remote switch on/off rather than a manual switch. Over the life of the program, AMI will provide a net benefit of $81.4 million to DTE Energy customers[1].

Beyond the significant cost-savings, smart meters provide a variety of customer service features that enable customers to better manage their consumption and avoid high energy bills. AMI technology also improves reliability by allowing us to shift to smart grid features, like isolating and resolving outages remotely, and analyzing the grid to predict and prevent grid failures.

[1] These savings are based on the cost-benefit analyses found in MPSC Case No. U-18014, February 2016.