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AMI includes all the components of a so-called “smart grid,” but for owners of property connected to the electrical system – whether residential, public, or commercial – the feature of the smart grid that will have the greatest personal impact will be the “smart meters” that have been or will soon be attached to their buildings.

Vermont electric utilities plan to substitute these for the analog meters common today. According to the Rutland Herald, the eventual build-out of Vermont’s AMI system will reach 300,000 meters, covering around 85% of Vermont’s grid-tied electricity consumers.

As the new meters have begun to be installed, controversy has arisen regarding meter-related privacy issues and – in the case of the wireless meters being used by the largest utilities – health issues.

AMI is a system of two-way digital communication between electric utilities and their customers’ meters. Rather than sending electric power out to those customers and then dispatching a fleet of meter readers each month to visit each location so that the utility can charge customers appropriately, customers’ usage information will be sent back electronically to the electric company and recorded by computer, in some cases several times an hour.

Among the advantages to the electric utility of this steady two-way communication – besides less-expensive and more-efficient meter reading – is the ability to constantly monitor the flow of energy and the functioning of its system.

When outages occur, personnel at utility monitoring stations will be able to identify the location, and perhaps the cause, much more quickly than at present, when they often have to search physically for the problem. Saving time reduces the company’s costs, and, because utilities are a regulated industry, lowering companies’ costs should reduce upward pressure on customers’ rates.

Vermont’s electric utilities also say AMI will enhance their ability to know when and where their product is needed, improving their planning capabilities. A primary goal will be to reduce their need to purchase more expensive “peak” power from generating sources tied to the New England grid.

Smart meters, and an energy grid with digital equipment that can communicate with the meters, will bring new benefits for utility customers, the utilities claim.

The meters will provide technologies by which customers will be better able to identify their own energy-usage patterns and either reduce costly uses of power or shift them to off-peak hours to save money. This ability will be enhanced if, once deployment is complete, companies institute varying “time-of-day” rates, with financial incentives to encourage off-peak usage.

In the future, new appliances will have computer chips that can tell the grid exactly how much electricity they are using. The smart grid could also be used someday to turn appliances on or off to avoid peak loads.

Energy efficiency was one of ARRA’s priorities. The grant is expected to cover 50% of the costs of the system, with the utilities coming up with the other half through a variety of means, including standard construction loans.

Yet there are differences among the companies in their rate of deployment and in the technologies used. Vermont Electric Cooperative, the state’s third-largest electric utility, with a service territory that covers a tier across roughly the northern fourth of the state, decided long before the stimulus bill to adopt AMI.

In fact, VEC is a pioneer, nationally, in AMI. It began rebuilding its system in 2005, and by now some 90% of its members (because VEC is a cooperative, its customers are member-owners) have smart meters. VEC claims that smart grid technology has enabled it to reduce service interruptions by 50%.

Vermont’s other utilities are deploying AMI on the time schedule dictated by ARRA. A major difference in deployment, however, is that most of the utilities, including the two largest – Central Vermont Public Service Corp. (CVPS) and Green Mountain Power Corp. (GMP), which are seeking state permission to merge – are installing wireless meters, which use radio-frequency systems for electronic communications between the consumer’s electrical smart meter and the utility’s digital infrastructure.

By contrast, the two electric co-ops – VEC and Washington Electric Cooperative – are using a wired technology called power line carrier (PLC).

The co-ops operate in some of the state’s most rural areas and determined that the direct connection of PLC – in which the power lines themselves will carry meter information to the companies’ central monitors – might be more dependable. That decision could also insulate them from a controversy that has enveloped the wireless technology.

But opponents aren’t buying it. They cite other sources that say the risks are greater, and also point at the cumulative impacts allegedly created by adding a wireless smart meter’s radiation to that of wireless phones, computers, and other wireless devices increasingly found in our homes today.

A group opposing wireless meters states on its website (stopsmeters.org): “Most Vermonters are only beginning to become aware that wireless smart meters are coming to them. It is critical to become educated on what the repercussions of that development will be for our homes, public places and businesses. There are extremely serious concerns regarding the adverse health effects of microwave radiation, the invasion of privacy and possible compromise of security, as well as questions as to how ‘green’ this technology really is.”

In early March four southern Vermont towns – Bennington, Manchester, Sandgate, and Dorset – voted at town meetings against the installation of wireless smart meters. All four are in CVPS’ service territory.

The votes carried no power of enforcement, and CVPS spokesman Steve Costello said they would not change the company’s plans. He said that the utility industry needed to do a better job of educating the public about all facets of AMI, including wireless meters. CVPS began installing the meters this winter in Rutland County and expects to be finished installing 160,000 wireless meters by the end of the year.

Meter opponents also have privacy concerns about smart meters, both wired and wireless. They worry that energy usage information transmitted from their properties could become available to police, marketers, or other third parties.

The Vermont chapter of the American Civil Liberties Union (ACLU) proposes strict enforcement of Fourth Amendment warrant provisions to protect customers’ data, and would also like to see safeguards against the sale of data that reveal consumer electrical usage patterns.

“We should all worry about this collection of energy use data and who will have access to it,” the website of ACLU-VT states.

To provide an option for those concerned about health or privacy issues, some utilities are allowing customers to opt out of having smart meters, but for a fee. CVPS is charging customers who don’t want to have a smart meter an extra $10 per month to cover costs such as meter reading.

Three draft policies on these smart-meter subjects have been proposed to the PSB by the state Department of Public Service, which represents the public in utility-related matters, according to Jim Porter of the Department.

The proposed opt-out policy would allow customers to opt out of having smart meters, but they – rather than other customers – would have to “bear the costs of that decision.” The extra charge would vary from utility to utility and will not be determined until April 2013, according to Porter.

The proposed privacy policy will require utilities to keep data obtained from the meters confidential. The data could not be disclosed without a judicial warrant. Utilities would have to adopt privacy policies, and customer personal information and data could not be sold or given away without the written, express consent of the customer.

Finally, the Department has proposed a policy to enhance cyber security and require utilities to report any known cyber attacks on the smart grid system. Porter said the PSB is expected to rule soon on all of the proposed policies.

Meanwhile, smart meter issues have also been under debate in the Legislature. At press time, the Senate had nearly passed a bill (S.214) that would require utilities installing wireless meters to provide a notice to customers informing them of their right not to have a wireless meter installed or, if one has already been installed, of their right to have it removed. Utilities would be allowed to charge an extra meter-reading fee to these customers.

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