Skepticism on power companies well-earned [Editorial]

Like it or not, a new generation of electric meters is on its way to Harford County.

BGE has called the new devices smart meters, a name that appears to have been coined to capitalize on the popularity of smart phones, even as that tactic appears to have backfired in certain circles. At recent county community input meetings, a topic on the minds of a fair number of speakers has been a general disdain for the smart meters.


The energy company assures its captive customers they can opt-out of the smart meters program – at least for the time being – but they'll have to pay an upfront fee of $75, plus an additional $11 a month to keep the old meters.

The new meters are expected to save BGE, a corporate affiliate of the 47-state power giant Exelon, on meter reading costs, making the old meter-reader dependent equipment more costly to operate, at least by comparison. (Go figure. Automatic teller machines cut personnel costs for banks, but generally there are big fees associated with ATM transactions, but teller transactions don't have associated charges.)

The smart meters also have the added functionality of being able to, if a customer so chooses, to manipulate certain equipment like electric heat and air conditioning, depending on the amount of demand on the power grid. It's all rather futuristic, and not necessarily in a good way. Sure, it would be nice to not have to pay extra when we forget to adjust the thermostat when no one's home, but do we really want to entrust the people we're paying for electricity with that level of responsibility?

It's a rhetorical question that's largely been answered over the past decade or so by our collective silence. The answer, time and again, has been the power companies can do as they like.

It really goes back to what started out as a good idea: airline deregulation. Prior to airline deregulation, the American marketplace was dominated by a handful of major airlines, including the iconic Pan Am and TWA, once fierce competitors that ended up merging after deregulation.

The result was a democratization of air travel. Before deregulation, people with the wherewithal to fly regularly on pleasure trips were referred to as the "jet set." Now it's the rare person who doesn't have the ability to save frequent flier miles to help pay for the occasional pleasure trip.

Airline deregulation worked out well for the general public, and deregulation quickly became a sort of social shorthand for increased competition and lower prices. The phone companies were next. An industry dominated by Ma Bell and the so-called Baby Bells that resulted from anti-trust actions on the part of the federal government, were cut loose and rebranded just a few years before wireless telephone technology became practical. It remains to be seen the degree to which lower prices were the result, but the comparison is almost impossible to make because even the most rudimentary cell phone in use these days is space age technology compared to the dial and ringer devices at the ends of land lines in common use 25 years ago.

Energy deregulation has been a vastly different creature. It is possible – though few people choose to do it – to have no telephone. There is no requirement that anyone ever fly to a destination for business or pleasure. A house or apartment with no electric service, however, will quickly be declared unsuitable for occupation by most municipal authorities.

Electricity is required for shelter – with food and clothing, one of the three necessitates for human existence. Moreover, electricity comes to a home from the nearest generator operating on the grid – courtesy of the laws of physics – regardless of which power company sends out the bill or receives the payment.

Providing electricity to the power grid at a rate that is equal to what is being consumed at any time of the day or night is an extremely complicated endeavor, one that requires rather intimate coordination among companies that theoretically are, or could be, in competition with one another. More so than airlines and modern phone companies, electric providers – and, to a large degree, the companies that deliver natural gas – are as much as they ever have been natural monopolies.

Yet power companies were eager to cast off the shackles of government regulation of energy charges, and be freed from the scrutiny of their finances by state public service commissions, and deregulation came to the power companies in the 1990s. It involved a nominal splitting of delivery systems – power lines, gas mains, transformers, pumping stations and such – from production facilities – hydroelectric dams, nuclear power plants and generators fired by coal or natural gas.

Though separated from each other on paper, the generating and delivery companies can be owned by still larger holding companies, though, at least, in theory, in arm's length relationships that supposedly allow for competitive pricing among the various electric generating (or gas providing) business units.

It's all highly theoretical, and easily manipulated from behind the scenes. The massive electric power broker Enron was regarded as having taken the shape of things to come in the world of deregulated energy – until it was revealed to be involved in market manipulation on an epic scale.

Since deregulation and the Enron scandal, gas and electric bills have continued to go up, not down, though there are those who argue prices would have gone up more without deregulation. And shopping for lower cost electricity is a lot harder than looking for the gas station with the lowest prices.


So when the power companies say, "Trust us," when it comes to anything, it's natural that there will be an awful lot of skepticism. In this case, BGE is embarking on what would probably be an enterprise of no public concern had, 15 or so years ago, it simply said it was installing new meters to replace 25- or 30-year-old technology. Given the level of control these meters are theoretically capable of handing over to the power company, and the track record of the power industry over those years, however, it's reasonable for people to be a bit agitated by the change.

Unfortunately, aside from complain, there's probably not much they can do about it.