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Posted on December 18, 2014

How Smart Meters Can Make You a Smarter Energy Consumer

By Jonathan Marshall

I recently discovered that my home refrigerator, purchased 20 years ago, is costing me $100 a year in electricity bills — about $60 more than an efficient new model of similar size.

Over 10 years, that means I could pay for a (low-end) new refrigerator just through energy savings alone — not even counting the $50 rebate that PG&E will give me for recycling my old model.

In the past, if I wanted to know how efficient my refrigerator was, I might have had to install special equipment to check my electricity usage. But instead all I did was go online and review a simple chart showing the energy use and cost of all my major appliances.

PG&E is testing Web-based applications that use information from customer SmartMeters to estimate the energy usage of various home appliances, including refrigerators, air conditioners, dryers, electric stoves and even pool heaters. They require no new hardware or devices and use algorithms to identify each appliance based on its typical energy “signature.”

PG&E is testing these applications through the EPIC program, a statewide research, development and demonstration program that evaluates how technologies can advance safety, reliability, affordability and clean energy.

As the screenshot below shows, besides reporting the energy cost of each appliance, the application I tested displays daily and monthly household usage and electricity costs, as well as trends in quarterly costs relative to other homes of similar size and other homes in your zip code. If you are a high-end user, that can help tip you off to rethink your energy habits.

Although some of this information is already available through PG&E’s My Energy portal, going deeper to the appliance level gives me a better understanding of my energy bill. And gaining all that insight in one report is both convenient and instructive.

Without such data, the vast majority of electricity customers have no clue how their appliances or their behavior really affect their energy bills. As a couple of economists pointed out two decades ago, it’s as if you got a single bill from the grocery store each month, with no itemization of what each good cost. How smart a consumer could you be?

Four economists at the University of California at Los Angeles recently ran a field experiment, providing detailed appliance-level usage data to a group of graduate student families.

They found, as expected, that consumer perceptions diverged greatly from reality. The average household overestimated the energy used in lighting by 75 percent, but underestimated the energy draw of TVs, computers, and other plug-in devices by 40 percent.

These misperceptions are likely to lead households to invest in the wrong energy-saving measures.

The researchers also found tremendous variation in energy use behavior. A quarter of high-consuming households in the sample—living in the same-sized apartment with the same number of people—used at least four time as much electricity for heating and cooling as the most frugal quarter of households. That suggests some households had plenty of room for more conservation.

Finally, they discovered—much as I did—that replacing an older refrigerator saved an average of $65 a year among this group of participants, or about 11 percent of their total electricity use.

Right now, PG&E is still testing these applications. We need to help make the algorithms are as accurate as we can and work through any technical issues. Depending on how viable and valuable the technology is for customers, this could become an important new consumer tool in the future.

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