The following story was in the business section of Monday's Fort Worth
Reprinted here strictly for research purposes.
Monday, May 7, 2007
Posted on Mon, May. 07, 2007
Suit claims meters have a number of issues
By R.A. DYER
Star-Telegram staff writer
AUSTIN -- In arguing two years ago for permission to charge their
customers millions of dollars for the installation of broadband Internet
service over power lines, TXU promoted the efficiency and convenience of
"Hopefully, after we get this installed and you get just outstanding
service ... you'll be so happy that you'll think it's a bargain," said
Stephen J. Houle, then TXU's vice president for corporate technology.
Now that "bargain" is in question. Customers in Angelina County have
sued the company, claiming that meters associated with the new broadband
service started spitting out bills much higher than warranted.
One customer received a monthly bill of nearly $1,000 for electricity
from a line that was connected to nothing, said an attorney representing
ratepayers around Nacogdoches. Another got monthly bills of $200 and
$300 for service to a barn that was only using a few light bulbs, he said.
"We don't know the exact cause -- maybe there's a problem with the
system, with the metering or the interpretive data or the way it's being
fed into the computers," lawyer David Guillory said. "But it ought to be
resolved and if it's happening here, it could happen anywhere else that
TXU installs these meters. And TXU plans to install them statewide in
the next few months."
Although it remains unclear whether the broadband service is
definitively linked to the metering complaints, the problems cast light
on an arrangement in which private companies stand to profit from public
The Texas Legislature in 2005 adopted Senate Bill 5, which permitted
electric utilities to enter into deals to create broadband service over
ratepayer-financed transmission systems. That legislation led to a deal
between TXU and Current Communications that could make broadband service
available to 2 million homes, according to the Public Utility Commission.
Current can sell the service and keep the revenue, although some of the
profit would flow back to TXU.
But the ratepayers who paid for the transmission system will not receive
the broadband service unless they pay for it, and will not get any
reduction in their rates to reflect profit from the service, nor receive
significant revenue for Current's use of the transmission network.
Ratepayers also must pay for the digital meters that work with the
"This is a sweetheart deal -- the average ratepayer will pick up the
costs, but will not get any of the benefits," said Geoffrey Gay, a
lawyer representing Fort Worth and other North Texas municipalities in
The North Texas transmission company -- it's a division of TXU Corp.,
although the transmission company recently changed its name to Oncor
Electric Delivery -- insists the new system will benefit customers.
It reports 300,000 digital meter hook-ups so far and an Oncor spokesman
said it plans to install more than 10 times that number by 2011.
Two years ago TXU estimated the cost of installing the system at $300
million to $600 million. A separate expert had estimated the cost of the
equipment upgrades at $300 to $400 per house, with some estimates
reaching as high as $1,000 per house. An Oncor spokesman could not
provide an updated price tag this week, and a spokeswoman for Current
did not respond to requests for comment.
The cost of the digital meters will be included in Oncor rates, as will
about $150 million to be paid to Current over the next 10 years. Those
costs will get passed on to Oncor customers because as a transmission
company, Oncor is the only division of TXU Corp. that remains
Current will pay Oncor for the use of right-of-way but otherwise won't
have to reimburse ratepayers for piggybacking on the publicly financed
An Oncor spokesman said that consumers will benefit because Current's
"Smart Grid" system will allow customers to better manage their
Many customers in Angelina County say the digital meters aren't working
The Angelina lawsuit, which was filed April 13, asserts that more than
10,000 residents were potentially affected by malfunctioning equipment
or some other problem relating to the transmission network. It says that
the company continued to collect the inflated revenue despite being
advised about the overcharges.
Schein said such complaints about the meters have not been reported
"We don't believe there is a problem -- the meters were tested by the
manufacturer, and we tested them when they were installed, and we went
out and evaluated several meters that people had questions with," Schein
300,000 of the meters have been hooked up so far, with plans for more
than 3 million by 2011.
A small energy monitor allows customers to keep track of their energy
usage and costs.
A lawsuit in Angelina County claims thousands of the meters aren't
working properly. An Oncor Electric Delivery spokesman said: "We don't
believe there is a problem."
Sources: Oncor Electric Delivery, staff research
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