Letter and Petition to KIUC

SUBHEAD: Residents seek fairness and to protect privacy rights in regarding KIUC Smart Meters.

By Douglas Wilmore on 15 October 2013 in Island Breath -

Image above: Illustration of Smaug, the gold hording dragon from "The Hobbit". in From (http://www.pdfreportage.co.uk/2012/12/let-down-of-the-year/).

Dear Honorable Members the Public Utilities Commission (PUC) of the State of Hawaii:

I am responding to the request submitted by the Kauai Island Utility Cooperative (KIUC) on October 3, 2013, which seeks to implement its proposed; (1) Non-Standard Meter Set-Up Charge and (2) Monthly Non-Standard Meter Charge. I have been a participating member of the cooperative since its inception and have observed the utility while it has evolved over the years.

KIUC was formed 2002 after being approved by the PUC. In its initial comments, the PUC noted that moving from a private company to a cooperative format should reduce costs of electricity to the residents of Kauai. That has not proven to be the case, and in fact the PUC approved a rate increase several years ago.

Because of the high costs of electricity on the island and the inability of the utility to reduce these burdensome charges, coop members have sought ways to reduce their electrical bill. As a result rooftop solar has become quite popular along with erection of some small wind generators. The commercial sector has also participated in this movement. Approximately ten large organizations provide 70% of the income for KIUC, and at least 5 of these groups are participating in major programs to generate some or all of their own power.

Thus KIUC is facing a shrinking demand for its product because it has failed to remain competitive. The utility needs to transform itself to insure long-term stability. Until this is recognized by the board and management and a new business plan is initiated the utility will make every attempt to increase its income. These changing economic dynamics may be the basis for the request from KIUC to increase payment from a subclass of coop members, who have opted out from having smart meters.

Fairness in Recovery of Full Costs
Several factors need to be considered in the “recovery of full costs” as provided in guidelines from the PUC. According to the initial KIUC press release, the smart meter project cost was based on 33,000 users with an estimated cost of $11,000,000.

One half of the money was provided by KIUC with the remainder provided by a grant from the Department of Energy. Therefore, the $5,500,000 provided by KIUC general funds split between 33,000 users means that each smart meter cost a utility member $151.51 plus a very small amount in Federal taxes. (In recent news articles the number of users eligible to receive smart meters has been reduced to 30,000).

About 10% or 3,000 coop members do not have smart meters and I am one of them. Thus individuals in the non-smart meter group have each paid about $150 through KIUC general funds for a smart meter but have received nothing. This totals to almost one-half million dollars paid by the op-out group with no goods or services provided by KIUC.

Moreover, in the future we will be contributing through our bills into general funds to support the costs of upkeep, maintenance and function of the entire smart meter program, services which we do not use, or benefit from.

Now, KIUC wants us to pay an extra $10.27 a month to read our meters, while we are also supporting the costs of running and maintaining the smart meter program which reads the smart meters. Thus, we are paying to support the effort of the smart meter group but management and the board does not want the utility to support reading the meters of the op-out coop group through use of its general funds.

There are several solutions to resolve this apparent inequitable biased approach. First, KIUC could refund or credit each of the non-smart meter accounts for the cost of a smart meter, an item which we have paid for but have received nothing in return.

Secondly, an objective third party could determine the per capita costs of operating the smart meter program and that amount could be subtracted monthly from each of our electric bill. This would create two separate groups, each class of users supporting their own billing and operating system and paying for their own costs. This would seem to satisfy some of KIUC’s intensions.

But is would not satisfy KIUC’s ultimate objective which is to derive more income from the group who opted out of installing smart meters. They might argue that all members work collectively in this cooperative, and that each individual must support the activities of the entire group, whether there is individual gain or not.

The 10% op-out group was given the opportunity to participate and for what ever reason they did not avail themselves of this “exciting new technology”. They now must support the near-total group effort--- in which 90% of the coop member are participating--- and suffer this economic disadvantage because of their own decision.

Finally, KIUC might also suggest that it is unable to credit accounts and resolve billing inequities with two member groups because these manipulations would be too complicate.

But if the 10% op-out group is financially supporting the other 90% of members to read their meters, shouldn’t the 90% then reciprocate by supporting the remaining 10% to read their non-smart meters? After all, this is a cooperative and there should be equality in terms of benefits receive by all members, not just benefits to the 90%. To not act in this manner creates a two-class system that is layered with discrimination and places individuals in the op-out group at a major economic disadvantage.

This 10% of members have already been economically disenfranchised by paying for a program that do not favor and have received no goods or services in return. They have saved the utility money by not having to buy 3,000 smart meters and pay for installment costs.

To place an additional monthly cost on these individuals establishes a punitive two class system, compounds the previous economic penalties which have been exerted on the group and counters the Federal law which demands that equality must be maintained within the utilities’ membership.
If costs are to be recovered by the utility, each individual member must contribute equally to these costs, just like each individual member has supported the smart meter program, whether they like it or not. This is not only fair but it is compatible with Federal law outlining equality of members. Moreover, it is consistent with the previous Federal court ruling related to this case, which will be subsequently discussed.

The Issue of Privacy
Electric utilities face decrease demand for the electricity they produce because of the growing use of user owned solar. Electrical utilities are shrinking financially. This fact has caused great concern in the industry and with their investors.

As a result utilities are seeking new avenues of revenues. The smart electrical grid provides such a new economic opportunity, for the utility can now sell information concerning home activity acquired from each individual customer. Smart meters monitor the use of all major appliances in the home and determine to some extent how they are used. Calibrated meters can determine oven temperature and duration of use and thus provide a list of the types of food prepared in the home.

Smart meters determine television usage time and some meters can even report on the specific television program an individual is watching. Other information such as when a person is in the home or away and when a person is sleeping are simple monitoring parameters obtained from these devices.

Spokespersons for Cisco, a major software and chip producer, speculates that the quantity of traffic on the smart electrical grid will be greater then that seen on the Internet. A California utility has devoted its entire research budget to develop programs to maximize the capture of such information and enhance crosstalk between the computers in the utility and the individual meter.  Utilities are anxious to sell their smart grid information to retailers, manufactures, insurance companies and law enforcement groups.

For more information on this subject please see: “Smart metering and privacy, a report to the Colorado PUC”, http://www.takebackyourpower.net/news/2012/10/14/confirmed-smart-meter-data-shared-far-and-wide/, http://www.smartgridtoday.com/articles/10030-pge-smart-grid-director-describes-efforts-to-mine-data?v=preview and review selected articles in the marketing magazine entitled Smart Grid Today.

When KIUC initiated its smart meter program it issued an edict that all coop members and customers were required to use smart meters. Inquiries were made regarding this requirement but no one in the utility would speak with coop members.

As a result, a lawsuit was filed by Adam Asquith against KIUC regarding his privacy rights as they related to smart meters (Adam Asquith vs. Kauai Island Utility Cooperative, U.S. District Court, Civil No. 12-00134HG-rlp). After deliberation a Federal judge negotiated a settlement in favor of Mr. Asquith, determining that a smart meter could only be placed on his property with his consent. When the Federal law of equality was applied, all KIUC members became covered by this determination.

In the final phases of the hearing with Mr. Asquith and the lawyer

 representing KIUC, the Federal judge said, “I think that
10 you may be able to work out some wording with the idea that
11. Mr. Asquith will possibly reserve the right to go to court,
12. should there be an attempt to charge him for not having a smart
13; meter, and then the issues would be before the court at that
14. point in time and there would be more information about how the
15. process is working and whether or not the privacy issues are
16. real privacy issues. And it might never come to pass because
17. the PUC may decide that it's not worth X amount of money, or

IB it's sufficiently few people that it really doesn't matter.” (Copied from Court Records, page 26).

The U.S. Constitution guarantees privacy in the home. It is clear that smart meters violate this privacy. The Supreme Court has already ruled that the use of thermal imaging to locate a person in the home is a violation of the 4th Amendment. A similar opinion was rendered by the court concerning the attachment of GPS devices to track cars, which requires a warrant in a criminal case. These cases show that the court has imposed restriction on the use of technology when invading individual privacy.

The right for the individual to determine privacy in the home, a Constitutional guarantee, has been confirmed by the ruling of the Federal judiciary in the Asquith case and this guarantee is not contingent on a monthly payment of $10.27 or any other transaction or condition.

Because of the illegality of the requests for payment by KIUC, which violate our guaranteed Constitutional rights, this proposal should be denied.

Is the proposed tariff on 10% of the KIUC members punitive?

At the end of each month a small rather old gasoline powered pickup truck drives onto my property. The engine is left to idle while a KIUC employ enters the back door of my home to read my electrical meter. This scene is the anthesis of what is now proposed in the new KIUC ten-year plan, which states it intends to reduce costs and carbon output of the utility in the coming years.

This scene also forms the basis for the KIUCs inflated economic proposal of a $10.27 monthly charge for meter reading for 10% of the cooperative members. If this per deem costs were applied to the entire KIUC membership, the total for meter reading would be $3,697,200/ year which is about 10 times more then actual expenditures budgeted for meter reading before the installation of smart meters.

Are there alternative, less expensive approaches to read electrical meters? First, the utility could average 3 or 6-month periods and read the meters at longer intervals, only a few times a year, thus greatly reducing costs. The CEO of the utility says this cannot be done because of the “volatility of fuel costs”. However, with 90% of the coop members on smart meters their meters could be read weekly or bi-weekly if necessary to accommodate cash flow if volatility in oil prices occurred. The 10% of co-opted individuals could receive average statements over a fixed period of time, which would greatly reduce meter reading and reduce costs.

Secondly, coop members could simply call in their meter reading at the end of the month. This exercise would be similar to what I perform when I call into the pharmacy to renew a prescription at no extra cost. I dial the pharmacy number, punch in the number on the prescription bottle and a recorded voice tells me when the drugs will be ready.

Many individuals have cell phones so a dated picture of the meter could be taken at the end of the month and sent to the computer at the utility for analysis and billing. For those technically challenged, a simple post card could be provided to communicate the meter reading and date.

All these approaches have been tested and used by utilities throughout the country. It is unclear why KIUC is so regressive as to use its antiquated highly expensive carbon producing little truck methodology. Is KIUC so far out of touch with modern communication and cost efficient management that it has to rely on this approach? If so the PUC should consider an intervention with the utility to educate the board and up grade management concerning 21st century cost-effective business practices.

If this is not the case, do the requests for these exceedingly high charges against a class of coop members represent a draconian means of economic punishment for those 3,000 individuals who didn’t conform to KIUC wishes? If this is the case then KIUC should be fined and restitution should be made to the damaged parties.

A variety of argument have been presented to demonstrate that the request for a meter instillation fee and a monthly payment for those individuals who opted out of the smart meter program is not fair, violates Federal law of equality, disregards member’s Constitutional rights of privacy and would create a class of members who would sustain a long-term economic disadvantage.

I submit that for these reasons the two requests for additional charges submitted by KIUC should categorically be denied by the PUC.

Respectively submitted,
Douglas Wilmore

Help us influence the Hawaii PUC on request by KIUC from PUC to charge customers for having non-smart meter:

To download a copy of KIUC Member Petition click here.
To download a copy of KIUC Non-Member Petition click here.

Mail filled-out petitions to:

Jonathan Jay
5956 Lokelani Road
Kapa`a HI 96746-9714

See also:
Ea O Ka Aina: KIUC, PUC & Opt-Out Charge 10/12/13


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