PSC denies KU and LG&E bid to deploy smart meters

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A smart meter (by National Institute of Standards and Technology [Public domain], via Wikimedia Commons

The Kentucky Public Service Commission has rejected a proposal by the Kentucky Utilities Co. (KU) and Louisville Gas & Electric. Co. (LG&E) to deploy advanced “smart” meters and associated technology throughout their systems.

In an order issued Thursday, the PSC said that, although it “sees benefits in advanced metering,” the two utilities 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, PSC news release said.

KU proposed to replace about 531,000 electric meters, while LG&E proposed to replace about 413,000 electric meters and to retrofit about 334,000 natural gas meters. The utilities estimated that the total capital cost of the new smart meter systems would be $165.2 million for LG&E – $103.7 million for electric and $61.5 million for natural gas – and $146.7 million for KU. The cost to deploy the new smart meters would have been an additional $13.3 million for LG&E and $15.2 million for KU.

Because the smart meters are read remotely, the utilities contended that the meters would produce net savings by reducing the cost of meter reading. The utilities also stated that the meters would improve system reliability and reduce losses from system malfunctions and theft of service.

In rejecting the application, the PSC cited several inconsistencies in the case presented by the utilities, including conflicting calculations of net savings and differing projections of the expected service life of the advanced meters. The utilities ultimately contended that the smart meters would last 20 years, but produced minimal evidence in support of that claim, the PSC said.

However, the PSC said KU and LG&E could expand existing pilot programs that offer smart meters to customers on a voluntary basis, encouraging the utilities to consider making the pilot programs more user-friendly by providing usage data that is closer to real time and by offering rate options that utilize the meters’ capabilities. Under the terms of the order, the utilities may double the programs to serve up to 10,000 customers of each utility.

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Via the Kentucky Press News Service