American Electric Power’s (NYSE:AEP) Indiana Michigan Power on March 23 filed with the Michigan Public Service Commission an application for authority to implement an advanced metering infrastructure (AMI) opt out tariff provision to be included in I&M’s terms and conditions of standard service.
The opt out tariff provision provides the ability for residential customers to voluntarily opt out of receiving an AMI meter, subject to applicable opt out charges.
The company added that it proposes that customers electing to opt out would be subject to a one-time charge of $44.07 per meter, when the request is received before the AMI meter is installed, or an $81.30 one-time charge per meter when the customer request is received after the AMI meter is installed. In addition, a monthly charge of $16.77 per month per premise would be charged to cover the incremental costs associated with the decision to opt out, the company said.
As noted in the pre-filed direct testimony of Brent Auer, a Regulatory Analysis & Case Manager in the Regulatory Services Department, with I&M, while I&M is not proposing a full AMI deployment now, it does anticipate making that transition within the next five years. However, at this point in time, Auer said, I&M needs the flexibility and option to replace aging metering infrastructure with AMI meters.
I&M recognizes that a small minority of customers may have concerns about AMI meters and would not want them installed at their service location, Auer said.
I&M began installing automated meter reading (AMR) meters in 2004 and Power Line Carrier (PLC) technology meters in 2005 in its Michigan service territory. The expected life for electronic solid state meters, such as AMR meters, is 15 years, and as such, some of the AMR and PLC meters are approaching the end of their useful lives, Auer added.
Auer noted that the customer benefits of AMI meters include that:
- Customers will have the ability to view daily or hourly usage data via a web page or app, including the ability to receive alerts based upon energy usage
- If a customer experiences trouble, the company will be able to remotely “ping” the meter to aid in determining if the meter is operating properly
- Customers will experience shorter wait times for electric service turn-on and turn-off because the company will be able to do so remotely instead of needing to send an employee to the customer’s meter
The company encourages all customers to allow the installation of an AMI meter in order to realize the various benefits and opportunities associated with AMI meters, Auer said. Customers with AMR meters electing to opt out will retain their existing meter – if it is not at the end of its useful life – or receive a new AMR meter. Auer added that for those customers with a PLC meter, the company would install an AMR meter, which would be identical to those currently in use throughout the I&M system.
If a customer elects to opt out of an AMI meter, the customer would be assessed charges based on the cost of the customer’s decision, Auer said, noting that it is appropriate for customers participating in the AMI meter opt out tariff provision to bear the costs to support that option.
Of the impact of residential customer AMI opt outs on meter department operations, Auer noted that AMI meters are normally installed in a concentrated in order to maximize their effectiveness and enhance meter reading operations efficiency. I&M would need to dispatch an employee each month to read a non-AMI meter in a concentrated area that has been converted to AMI metering. Since the company is not contemplating a full AMI deployment plan at this time, there is no impact to meter reading staffing in order to support customer opt out readings.
Auer also noted that since I&M would be using AMR meters – I&M’s current standard meter – for the opt out, there would be a minimal impact on annual meter sample testing procedures.
Among other things, Auer said that the revenues from the opt out tariff provision would be accounted for as miscellaneous service revenue under “FERC Account 451, Miscellaneous Service Revenues.” The one-time up-front meter change-out charge and the monthly meter reading charge would be recorded in that account, which would offset the costs associated with providing the opt out tariff provision. Auer added that if those charges were not collected from AMI opt out customers, then all customers would be subsidizing the costs of that tariff provision.