Duke Energy Smart Meter Billing Disparity Study: An Interview with Vince Welage

and there is more to come

(and it’s even worse for those customers paying a punitive surcharge for the opt-out meter.)

We published an article this week explaining that as Germany is adopting “intelligent metering,” customers with low usage will not receive a transmitting meter.

“The EU has set itself strict climate targets. By 2050, the whole of Europe is to become climate-neutral and 55 percent of greenhouse gases must be saved by 2030. One of the measures in Germany is the digitization of electricity meters, which creates the best conditions for a conscious use of energy.”

“In the coming years, every household will be obliged to change its electricity meter. Households with an average consumption of less than 6000 kilowatt hours per year will be required to receive a digital electricity meter without a data connection via a communication module by 2025..”

Digitale Stromzähler: alle Infos auf einen Blick | LichtBlick

Germany agrees with the observations of an activist-researcher citizen scientist in Ohio who has been investigating Duke Energy bills for 3 years.

“Current smart grid billing schemes are creating a disparity.”

Consumers with lower levels of energy consumption are subsidizing customers with higher consumption.

Those who are paying a meter opt out fee are facing double jeopardy, financing the grid through fixed charges and riders for the smart grid, (which not only does not benefit them but endangers their health) in addition to punitive surcharges.

Vince Welage was interviewed by Nick Rogers of the Ohio Register in April of 2024. You can jump to the full article here.

Duke Energy Bill Study: An Interview with Vince Welage

The Ohio Roundtable Apr 23, 2024 BY NICK ROGERS

CHARDON - Smart Meters are slowly taking hold of homes throughout the state. But as the digital trend trickles ever upwards so too are customers' energy bills, sometimes seemingly without cause. Local technology expert Vince Welage has been investigating the root causes for these anomalies sweeping the state and believes he may have the answer to explain the worrying trend. Welage has worked closely with organizations such as SW Ohio for Responsible Technology and agreed to answer questions pertaining to his research on the issue.

Hi, Vince. Thank you for agreeing to talk to The Ohio Roundtable.

My pleasure.

So, you and I got connected through activist and SW Ohio for Responsible Technology (SWORT) board member Monique Maisenhalter. The three of us share deep concern over HR 3557 and dozens of other wireless deregulation bills making their way through Congress. Your main endeavor in recent years has been a study/analysis of Duke Energy customers’ bills after the deployment of Smart meter infrastructure. Duke Energy is the primary utility in SW Ohio, correct?

Correct.

While investigating Duke customer charges in general, a key focus of yours has been the fees imposed upon those who refuse the new 2-way “AMI” Smart technology. But, before we dive into that, please give us a little more insight into your professional background and how it relates to this study.

Sure. My early work experience included database application software development in areas covering accounting, inventory control, energy, and healthcare. In a more recent position, I was both an occupational health administrator and medical IT analyst for 10+ years supporting manufacturing plant operations for a large consumer products company. I managed data access privileges to employee medical and disability records for all 32 manufacturing plant health care units in North America. I provided any required employee medical history and/or trend reporting for the plant managers and nurses.

For the Duke study, did you employ the help of an assistant(s), or have you shouldered the entire burden yourself?

It was a standalone operation from the start.

How many personal energy bills have been submitted to you for analysis and comparison?

I have utilized 600+ monthly statements from the years of 2018-2023, covering 15 zip codes in SW Ohio for homes between 1,275 and 3,500 square feet.

What were your initial findings?

My study found an average monthly kilowatt-hour (kWh) usage of 628 as the median value among the study panel members. The majority of panel study members who selected to opt-out of Smart meters at some point in time were given a digital opt-out meter while some others on the panel still retain the AMI Smart meter. The Energy Information Administration (EIA) – the statistical agency of the Department of Energy – found an overall United States kWh/monthly average of 895; 904 for Ohio, covering the 2022 reporting period.

628 in SW Ohio vs. 904 for the state? That’s a rather large discrepancy.

The EIA 2022 value for Ohio is in the normal range for a state with a history of moderate energy consumption, whereas states like Texas, Louisiana, etc. have a long history of much higher levels of energy consumption. The SW Ohio discrepancy is more about the fallacy that a Smart meter home installation is an automatic indicator of cost savings. For a homeowner to maintain a 12-month kWh average under the 750 kWh recognized energy efficiency standard, the consumer must maintain very conservative home cooling temperatures during the non-heat months (May-Sept) of the year as well as very low levels of electric kWh usage during the 2PM-8PM time period that tracks On Peak kWh hours Monday-Friday weekdays. It isn't fair for consumers who are maintaining these conservative operating controls during those periods to be charged the same distribution rates as customers tracking at much higher energy consumption levels.

What compelled you to embark on this study?

Ongoing complaints from SW Ohio Duke Energy consumers about overcharges on the monthly bills prompted the study which I began in 2021.

Please provide some additional detail of how the study has been constructed and organized.

The study is, as I mentioned, a panel study, which consists of a group of residential customers (primarily SWORT members) who provided at least one year’s bill – some two years – covering 2018-2023. Each panel member is assigned an anonymous account number. Any billing information submitted is kept in strict confidence. To enter a customer account into the study, I just needed a copy of the latest bill to determine if the actual usage fits within the study qualifiers for gas and electric consumption. Data collection for the study is ongoing in order to track the most recent Duke Energy customer rate increase. The December 2022 rate increase both amended and continued several existing delivery riders (tariffs) as well.

What is a typical monthly bill from the panel you have studied?

Among the billing statements submitted by panel members, results have shown a dramatic 54% of customers with fees greater than $90 and 84% greater than $75. For those customers who selected to Smart meter opt-out, the total customer fees are well over $100 per month which has been the case for the past 3+ years as part of Public Utilities Commission of Ohio (PUCO) approvals on rate increases since 2018. Also, according to study results, the persistent high overcharges result in homeowners paying more in fixed fees versus actual energy usage charges in many months of the year.

As author of the study, what was your primary goal?

My primary goal was to first determine the cost drivers for the hidden charges (gas and electric delivery riders) on the Duke Energy monthly bill. These values are actually group charges that are comprised of the individual billing tariffs defined as rate codes. A secondary goal was to determine the energy usage median value by using the 12-month kWh average provided in the snapshot section of the monthly bill as a key indicator for actual energy efficiency in the home and not the narrative promoted by PUCO and the legislators. The 12-month average value can help determine how practical it is for that homeowner to lower his or her monthly energy consumption.

Is there a monthly kWh usage “cutoff” that PUCO deems “energy efficient”?

Utility commissions across the country recognize 750 kWh as the standard 12-month average for energy efficiency. However, most legislative proposals will only equate income (federal poverty guidelines) with energy efficiency rather than a 750 kWh standard.

One would think there would be a clear agreement between PUCO and legislators on this issue. Why do you think that discrepancy exists?

Based on my study findings, I believe this omission is by design to avoid any discussions about possible consumer discounts. The energy usage/low-income connection that is part of the service rule that allows a distribution rate reduction for a rate category such as RSLI (Residential Service-Low Income) is an important concession by the utility companies that low energy usage means that less distribution resources are needed for that group of consumers. The same energy usage connection persists using the 12-month average 750 standard. This disparity in the rate categories requires some much-needed legislative oversight of PUCO rate approvals that are causing the current unbalanced amounts as overcharges on many customer accounts.

Smart meters haven’t made this “unbalanced amounts” situation any better, have they?

Smart meters provide no cost saving benefits to consumers with monthly average usage levels well below that 750 standard in terms of energy efficiency.

Do all Ohio utilities use the same billing blueprint?

The actual electric tariffs approved by PUCO can vary among the different Ohio utilities, but the concepts are similar. In many cases, the tariffs are identical in name and scope; especially those specific to Smart meters. For example, certain electric delivery riders include their own kWh usage calculation methodology connected to Smart Meter distribution.

Please explain what new rider tariffs came about post-Smart meter rollout.

For all the utility companies, there are at least two riders specific to Smart Meters: Distribution Capital Investment Rider (DCI) – defined as “Costs of AMI replacement project” (smart meter costs only) and Power Futures Initiative Rider (PF) – defined as Costs of AMI replacement project communication infrastructure supporting costs. Those customers who have chosen to Smart meter opt-out still absorb these extra costs. The delivery riders are derived from customer usage-based distribution charges.

To the best of my knowledge, all Ohio utilities – such as my provider, FirstEnergy – currently offer customers the “choice” of opting out of Smart meter installation, or for their current Smart meters to be replaced with the former analogue meters (if available) but, as you’ve described, there’s a sizable catch, isn’t there?

Ohio utility opt-out fees are determined by the utility and PUCO. The Smart meter opt-out fees have always been a punitive measure. In many cases, the Smart meters were installed without homeowner permission or consent. Aside from the accounting story that supports the elimination of the opt-out fees, there persists an important part of the medical story as well. In 2017, a letter signed by 3 doctors was submitted to PUCO asking that there be no fees approved for Ohioans who wanted to opt-out of electric, gas, and water Smart meters.

Are a good number of residents becoming aware of health effects caused by the installation of Smart meters?

Yes. By the time the aforementioned doctors’ letter was written, many residents were already aware of the health hazards and other dangers from Smart meters.

It seems, then, that Smart meter-concerned Ohio energy consumers – many of whom are living paycheck-to-paycheck – are faced with a really difficult choice…or perhaps no choice at all, really.

Yes. They are faced with an added cost burden aside from the fixed monthly fees. It has created a real undue hardship for many Ohio energy consumers. The lynchpin that keeps the Smart meter replacements in place is the $30/month opt-out fee. However, real evidence is needed to justify canceling the AMO rider (Advanced Meter Opt-Out) since the fee has been in place for a long time. My panel study results provide evidence that nobody can dispute about the financial hardships it has created since the original PUCO approval in 2016. That kind of strategy is usually how something can be changed; if you show real financial harm done from an existing PUCO-approved regulation.

How are utilities justifying these riders?

Volumetric rates, which place much of a utility’s fixed costs in the usage (kWh) charge of a tariff, have created a number of social problems as they relate to economic efficiency and equity. The heightened interest in fixed and demand charges for residential electricity customers has sprung largely from the flaws in the prevailing rate design for residential electric service. Some riders cover costs that both utilities and various environmental advocates support. Examples include costs for improvements to maintain and modernize the grid. Customer charges under other riders are more controversial.

Read the rest of the article here:

Duke Energy Bill Study: An Interview With Vince Welage

Germany Smarter than the U.S. About the Smart Grid

Note also that the German intelligent metering system gives customers actionable information about their energy usage, unlike the meters that have been widely installed in the United States, under the banner of sustainability.

Germany:

Digitale Stromzähler: alle Infos auf einen Blick | LichtBlick

During the Obama administration the decision was made to collect data on every ratepayer.

The two-way wireless meters were justified in part as required in order to facilitate integrating EVS, solar, and other renewables into the grid,

• without considering the option of focusing on the premises with solar and EV’s and appliances that can be tapped to shed load, like a swimming pool pump or heater.

• without determining how to ensure that inverters would not pollute power quality

• and without monitoring health and environmental impacts

How much money would American ratepayers have saved, especially low-income ratepayers, if the utilities and sustainability advocates had adopted a reasoned approach concerning costs associated with an essential service?

As the country mobilizes to provide more electricity for data centers, a smart meter is of no benefit for grid balancing via a residence that only houses a refrigerator holding insulin, lights, and a cellphone charger.

Yet one of these homes received a smart meter in the controversial Worcester National Grid Smart Meter Pilot Program. The customer receiver lower electricity rates for certain hours of the day for participating in the pilot program, and the utility used this to justify the conclusion that the smart meter resulted in customer cost savings compared to non-enrolled customers, because the pilot was designed to support that conclusion.

I could never find clarification about whether it was more efficient to use an electric teakettle or the gas stove to boil water for tea….

and, how many times do I need to access the information in order to be able to make informed decisions about my energy consumption?

I don’t need this:

And I Don’t Need This:

In the real world of evidence-based decision making, instead of decision-based evidence making, Americans have been taken for quite a ride under the banner of sustainability.

It’s never too late to start cleaning up the clean energy mess.