[TowerTalk] BPL

[Tom Anderson]

The following story was in the business section of Monday's Fort Worth 
TX Star-Telegram:

Reprinted here strictly for research purposes.

http://www.star-telegram.com/100/story/93650.html

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 
the system.

"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 
investments.

The legislation

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 
broadband service.

"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 
utility matters.

Consumer benefits

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 
rate-regulated.

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 
transmission system.

An Oncor spokesman said that consumers will benefit because Current's 
"Smart Grid" system will allow customers to better manage their 
electricity usage.

Digital meters

Many customers in Angelina County say the digital meters aren't working 
correctly.

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 
elsewhere.

"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 
said.

Digital meters

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