December 11, 2014
The Ontario Auditor General's report on smart meters has draw a lot of attention to the question of smart meter deployment and time of use energy pricing. I have been participating in an SSHRC funded research project involving academic partners in Ontario, BC, Quebec, and the US around smart meters and smart grids. A working paper on the state of smart meter and smart grid policy and practice in Ontario is on the SEI website at http://sei.info.yorku.ca/files/2012/12/Beyond-Smart-Meters-April-28-2014.pdf
The Auditor General has placed a very strong emphasis on the negative dimensions of smart meter deployment in Ontario. There is no question that in the effort to move smart meter deployment forward quickly serious errors were made. At the time the key decisions were made, in the middle part of the last decade, there were very strong perceptions of a crisis around the province’s ability to meet critical summer peaks in electricity demand. Smart meters were seen as an essential tool demand response, particularly through the implementation of time of use pricing, and also as a means for grid managers to strengthen their ability to manage and stabilize the grid. At the same time, the rapid roll-out of smart meter deployment before technical and interoperability standards were fully developed, has led to ongoing concerns regarding the potential for future upgrades in capabilities and services.
That said, the Auditor-General might have more fully acknowledged the potential benefits of smart meter deployment. Smart meters are an enabling technology, whose potential uses have yet to be fully realized. This is in part a result of the consideration that the software and technologies needed to fully utilize the data being generated by smart meters are only beginning to emerge.
The Auditor General also ignores some important successes around smart meter deployment in Ontario. The process has proceeded with remarkably little social conflict – a situation in stark contrast to what has been seen in Quebec, BC and many US states. There have also been important successes around privacy and data access issues that flowed from collaborations between the IESO and Ontario’s information and privacy commissioner. Our early experience with the technology has also put us a generation ahead of most other jurisdictions around the emergence of a smart grid. Most of the places we have looked at in Canada and US through our project are still at the smart meter implementation stage. We are moving well beyond that in terms of the technical and policy conversations that are now happening in Ontario.
It is important to separate issues around the concepts of smart meters and time of use pricing, from the specific problems with implementation in Ontario - not throwing the baby out with the bathwater as it were – something around which the Auditor General could have done a better job. Much of the criticism levelled in the report isn't about whether smart meters and a smart grid are a good idea per se - rather it is about how the government handled implementation – its failure to make as full use of TOU pricing as it could have, for example.
More generally, it is unfair for the Auditor General to blame smart meters and FIT contracted renewables for the problems of suplus baseload generation and the global adjustment. Both of these problems are overwhelmingly driven by character and cost of the province's nuclear power plants, something the Auditor General fails to acknowledge.