3. SCE's Proposal

Pursuant to D.11-11-006, SCE filed a compliance proposal on November 28, 2011 which included an analysis on the technological feasibility and related cost to provide the following opt-out options:⁷

1. Analog meter - Under this option, an electromechanical (analog) meter would be used in place of the wireless smart meter. This option would require the meter to be read manually every month.

2. Digital meter with no radio installed - Under this option, a digital meter, with no radio communications ability, would be used in place of the wireless smart meter. Some of these meters may be able to store interval energy consumption data. This option would require the meter to be read manually every month.

3. Smart meter with radio transmission turned off - This option would retain the existing smart meter, but have the radio transmission capability turned off. Under this option, the meter would need to be read manually every month.

4. Wired smart meter - Under this option, interval energy consumption data would be transmitted to the utility through a traditional telephone line, fiber optic, a power line carrier or other wired technologies. Since this option would allow the meter to communicate with the utility, the meters would not need to be read manually every month.

Of the four options under consideration, SCE's preferred option is "a non-communicating `radio-off' meter ... with a monthly interval meter read performed by SCE's personnel."⁸ SCE states that this option "most closely supports California's Energy Action Plan (Updated)" and better integrates with the Edison SmartConnect Program.⁹

SCE states that it is not currently feasible to disable the radio transmission capability of the Edison SmartConnect meter remotely or to turn the wireless radio on remotely at specified periods to transmit usage data. It notes that since the radios on the Edison SmartConnect meters are not designed to allow these capabilities, adding these functions would require significant changes to the existing Edison SmartConnect system.¹⁰ Further, SCE states that adding these functions would "fundamentally change SCE's Edison SmartConnect back office systems" and result in significant implement costs.¹¹

SCE estimates that approximately 61,000 of its residential customers would select the opt-out option.¹² It further notes that its cost estimates assume that only one opt-out option will be offered. Finally, SCE states that its estimated costs are for the 2012-2014 time period and that any costs incurred after that period would be included in future General Rate Case applications.

SCE states that while an analog meter opt-out option is feasible, it is not consistent with California's Energy Action Plan, as "it does not provide customers with interval billing data to support time-differentiated or dynamic rates, such as time-of-use, peak time rebate, or critical peak pricing."¹³ SCE further notes that offering this option would require it to maintain its legacy billing systems and data gathering processes.¹⁴ Finally, SCE states that while there is a slight cost savings with customer self-reading of meter and having an SCE employee read the meter on a quarterly or semi-annual basis, there are "significant uncertainty in terms of obtaining accurate and timely customer meter reads."¹⁵

SCE does not recommend that a wired meter opt-out option be offered. It states that this option would need to connect to its back office systems via a dedicated telephone connection or through a power line carrier (PLC) device. "[B]oth options are fundamentally different from SCE's Edison SmartConnect system, thus these options would require significant system redesign to be able to receive such information into SCE's back office systems."¹⁶ SCE also notes that the telephone-based wired meter option would require the development of new security measures.¹⁷ It further states that the PLC-based wired meter option could require the installation of a pole mount collector for each customer, depending upon the physical distribution of the opt-out program participants.¹⁸ As a result, SCE estimates that the telephone-based wired meter option would cost approximately three times more than the other opt-out options, while a PLC-based wired meter option would cost 12 times more.¹⁹

SCE states that a digital meter with no radio installed (radio-out) and a wireless smart meter with the radio turned off (radio-off) are both feasible opt-out options. It notes that while both of these options would require the meters to be read manually, SCE personnel could still collect interval energy consumption data.²⁰ SCE further states that both options would require the vendor to exchange the entire meter. Therefore, the cost to implement these options would be the same, regardless of whether the customer currently has an analog meter or a SmartConnect meter.²¹ As with the analog meter opt-out option, SCE recommends that SCE employees read the meters monthly so that interval energy consumption data can be collected. Although the radio-out and the radio-off options are fairly similar, SCE prefers the radio-off option. It states that this option "best integrates with SCE's Edison SmartConnect Program, as authorized by the Commission in D.08-09-039, by leveraging the investments in the meter types, back office systems, and business integration processes."²²

Based on its assumptions, SCE estimates that the costs for each of the options would be:

TABLE 1

ESTIMATED COSTS FOR OPT-OUT OPTIONS²³

	Analog Meter	Radio-Out	Radio-Off
Cost of Option
Total Expense	$43,571,506	$50,913,412	$50,913,412
Total Capital Cost	24,474,275	22,111,116	22,111,116
Total Cost of Option	$64,045,780	$73,024,528	$73,024,528

Initial Fee*
Non-CARE	$91	$91	$91
CARE	$73	$73	$73
Monthly Fee*
Non-CARE	$25	$30	$30
CARE	$20	$24	$24
Exit Fee*
Non-CARE	$91	$91	$91
CARE	$73	$73	$73

Finally, SCE states that its fees assume that all costs associated with offering the opt-out option will be recovered from the opt-out customers. SCE states that if the Commission adopts a fee structure that will not allow it to recover all costs from opt-out customers, SCE should be allowed to utilize a memorandum account, with monthly transfers to SCE's Base Revenue Requirement Balancing Account, to ensure full recovery of costs.²⁴

⁷ D.11-11-006, Ordering Paragraph 2.

⁸ Southern California Edison Company's Smart Meter Technological Feasibility and Cost Information Compliance Proposal Pursuant to D.11-11-006 (SCE Proposal) at 2.

⁹ SCE Proposal at 2-3.

¹⁰ SCE Proposal at 5-6.

¹¹ SCE Proposal at 6.

¹² SCE Proposal at 7, fn. 9.

¹³ SCE Proposal at 12.

¹⁴ SCE Proposal at 8.

¹⁵ SCE Proposal at 10.

¹⁶ SCE Response at 15.

¹⁷ SCE Proposal at 16.

¹⁸ Id.

¹⁹ SCE Proposal at 17.

²⁰ SCE Proposal at 12, 19.