Expert: Stimulus project wastes about $1B in TN

By TNWatchdog Staff on January 16, 2013
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By CHRISTOPHER BUTLER

Public utility officials in Chattanooga, Knoxville and Memphis have preached the benefits of a new taxpayer-subsidized technology they say will lower their customers’ utility bills and reduce electrical outages.

Known as a digital smart grid, this technology uses computers to distribute electricity. Those benefits, however, are short term — and that makes this investment, funded with almost $1 billion in federal stimulus dollars nationwide, an unwise use of money, according to an expert in computer and communications engineering.

“The residents of Chattanooga, Knoxville and Memphis need to know that this is going to cost them a lot of money. They won’t get what they think they are going to get. I’ve researched this all over the country, and it has not delivered,” said Timothy Schoechle, a former faculty member of the University of Colorado’s College of Engineering and Applied Science.

Public utility representatives, however, say the technology makes the electric power grid respond more efficiently to supply and demand variations, thus saving money.

“Any improvements in operational efficiency that we’re able to gain with smart grids allow us to go longer without having to have an electric power rate increase,” said Danna Bailey, spokeswoman for the Chattanooga Electric Power Board, which received $111 million in federal stimulus funds to help carry out its smart grid project.

The Knoxville Utilities Board received $3.5 million in stimulus funds, while the Memphis Light, Gas and Water Division received more than $5 million.

A digital electronic meter, otherwise known as a smart meter, is one component of the smart grid and is supposed to offer detailed information to consumers to help them better manage their utility bills.

The Knoxville Utilities Board, for instance, will deploy about 3,800 smart meters in the city, according to documents from the U.S. Department of Energy.

The stimulus money in Memphis, meanwhile, is modernizing the downtown electric grid, government buildings and the region’s major medical centers, including St. Jude Children’s Hospital, said MLGW spokeswoman Glen Thomas.

Overall, the U.S. Department of Energy granted more than $700 million in stimulus money to carry out smart grid initiatives nationwide.

In an interview with Tennessee Watchdog, representatives from the Knoxville and Memphis utilities defended smart grids, saying the upgrades also are designed to extend the life of their aging infrastructure.

Public utility officials, however, are wasting taxpayer money with this project. Furthermore, they are also killing jobs, Schoechle said.

In  “Getting Smarter About the Smart Grid,” Schoechle argues that the federal government wastes money on smart grid initiatives that will soon turn obsolete and not integrate well with future technology.

“The reason people are being misled on this topic is because the issue is quite technical. What does a meter do? It’s a very arcane topic, and only engineers understand it — and most of those engineers work for power companies, so they aren’t going to spill any beans.”

Bailey, in contrast, said that the advantages of the smart grid in Chattanooga are already clear to her.

“The benefits are well worth the costs. We estimate that the community loses roughly $100 million a year to outages. We’re already seeing reductions in outage durations of 50 percent or more, plus improvements in operational efficiency and reduced costs of outage restoration,” Bailey said.

Schoechle, however, said public utility officials are not receiving any returns on their stimulus-backed investments. According to his research, smart meter networks across the country are still not successfully managing electricity, nor are they successfully managing supply and demand.

“The only thing that smart meters do is help to cut meter reading costs and then helping meter readers get fired,” he said.

“Even though the public utilities claim that they can do all of this wonderful stuff, it’s all really a bunch of futuristic public relations. What they are promising has nothing to do with the products that they are actually installing. Those things are not being done. They are used to justify the expenditure of billions of dollars on meter networks that do nothing but benefit the bottom line of the utility company,” Schoechle said.

The Knoxville Utility Board has not raised rates on customers to accommodate smart grids, but only 1.4 percent of customers so far have benefited. KUB officials have not decided when they will deploy smart grids to their entire coverage area.

Chattanooga utility officials plan to deploy 10,000 more smart meters throughout the city later this year, Bailey said.

Thompson was unavailable to comment on MLGW’s future plans.

Contact Christopher Butler at chris@tennesseewatchdog.org

Posted under Featured, Federal Stimulus, Government Waste, Misuse of funds, News.

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