What is the Financial Impact of Smart Meters?

In government, and in business, often times the decision to move forward with spending and investing large sums of money is based on a cost effectiveness or return on investment analysis. If the analysis shows that an investment of $1.00 will yield $1.5 in return, the policy or action is deemed to be cost effective and therefore, a good investment.

As we now know, the City of Tallahassee relied on a cost effective analysis provided by Honeywell Inc., – the vendor for the smart meters. The analysis indicated that over a 15 year period the smart meter program would be cost beneficial for residents of Tallahassee. This analysis was used as support for moving forward with the program.

Beyond the potential conflict of interest with a vendor providing a cost effective analysis for a program they are selling, there remains serious questions about the analysis.

The Honeywell analysis indicates that if 25,000 customers sign up for load control programs, the City of Tallahassee will spend $39.2 million over 15 years and save $40.6 million for a net savings over 15 years of $1.4 million.

Is this a good deal? Consider this… if you assume an average of 100,000 utility customers per year over the next 15 years, the net benefit per customer per month would be $.77.

7 Responses to "What is the Financial Impact of Smart Meters?"

  1. I think “smart metering” has potential if rates vary substantially over a day and the consumer has access to that information and can plan accordingly. But, I have sent email inquiries and called Talgov about smart metering, no answers, ignored, sent to Honeywell one time. There is little transparency on the program. When will I see the benefit of what I the consumer paid for? How can I use it, and when? “Your Utilities” obviously does not mean me! Glad I found this discussion.

  2. Our electricity bill doubled after smart meter installation.
    I think this is completely shady, to the point of corruption.
    I will take measures to monitor electricity usage and if I find major discrepancies with these smart meters I will start a class action suit against the city and I will post this story all over the news channels.
    These f*’s will know that I will not bend over for the city council to f* me in the rear without some blood being spilled in the legal metaphorical sense.
    Honeywell can F* off, and so can the lobbyists who took the bribe money to let this legislation pass through.

  3. Another perspective – my utility bill more than doubled when smart meters were installed in my neighborhood. Naturally I called and scheduled an audit. The result – my old meter apparently had not been functioning properly for quite some time.

    Assuming mine was not an isolated case, the increased revenues may be greater than the consultants originally estimated.

  4. If you want to know why the City went with Honeywell and the Smart Meter project follow the money. Who besides Honeywell is benefiting from this? Follow the money and some of the reasoning may become self evident.

  5. What is the useful life of the meter… if they need to be replaced after 15 years… get my drift…

    Does the cost analysis include the cost to automate/web enable the full benefits of the new meters?

    When will the City implement rates based on peak consumption times?

    When will the City start giving the discounts for lower consumption instead of larger consumption?

  6. This is another example of our city/county elected officials playing their political games to make themselves look good when it comes time for re-election or when they try to run for a higher level position. The city’s “Green Projects” are another example of their political games instead of truly trying to help the environment & tax payers. If the city was really interested in being “Green” why were they trying to bring a Bio-mass plant to town & put it right next to a low-income residential neighborhood? What wrong with using Florida Power & Lights or another cheaper electric company? Sorry to ramble but I’m passionate about these matters.

  7. As usual the city made a decision that concerns the city/county tax payers, but took no input from the people that this will directly affect. Not only is there a conflict of interest with taking a cost effective analysis from the company that sells the products, but were the other companies up for this bid & why wasn’t an outside company contacted to analyze the true cost of this program for the tax payers. From the figures that are posted here I don’t think this is a big enough return for the city & tax payers.

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