Buoyed by an authorization from TVA whose recent review determined the CU proposal to be consistent with the TVA Act and TVA Power Contract, members of the Cleveland Board of Public Utilities on Thursday approved the rate on a motion by Eddie Cartwright and second by Cleveland Mayor Tom Rowland, who holds a board seat.
Others favoring the rate were board members Joe Cate and Chari Buckner, and board chairman Aubrey Ector.
In a related move, the CU board also unanimously approved an amended version of the utility’s Identity Theft Prevention Program. CU reviews these policies every two years and updates them as needed; however, to help reassure customers that their power-use data being transmitted by the AMR, or SmartMeter, technology is secure, the board included the new electronic transmission procedures in the Identity Theft Prevention manual.
Board members authorized the guidelines on a motion by Rowland and second by Cartwright. Again, the recommendation received the unopposed vote of the governing body.
CU President and CEO Tom Wheeler proposed the AMR opt-out rate at a board session earlier this month and said it would be brought up again for a formal vote in a later session in order to allow time for board review. Thursday’s agenda included the proposal in the aftermath of TVA’s review which Cleveland Utilities requested.
Approval came in a letter dated Aug. 21 from Cynthia L. Herron, director of TVA’s Retail Regulatory Affairs.
In her authorization for the CU opt-out rate, Herron wrote, “We have reviewed the proposed monthly charge of $10 for those residential and GSA-1 customers that choose not to install the AMI (Advanced Metering Infrastructure) meters on their houses for consistency with the TVA Act and TVA Power Contract. As long as the program is applied consistently and in a non-discriminatory manner to all applicants and participants, TVA finds it to be consistent with these TVA regulatory requirements.”
In his letter to TVA requesting the agency’s review, Wheeler explained his rationale in the same manner that he proposed the concept to CU board members on Aug. 2.
“We plan to give this new rate its own classification and depending on the total number of opt-outs, place these customers in their own special route to be read each month,” Wheeler wrote. “By classifying these customers together, we can monitor our expense in reading these meters manually.”
As he told board members previously, CU’s monitoring of the manual meter-reading may lead to a decrease or an increase in the $10 rate “... depending on the actual expenses we incur.”
He added, “There are other accounting costs that will be involved [in] handling these opt-outs separate for the AMI meters we will have installed. Until we actually implement the rate, it is difficult to project with any accuracy what the entire expense will total.”
Of more than 26,000 AMR units that have now been installed, only 42 customers have declined the meters, according to Bart Borden, vice president of the CU Electric Division. Wheeler projects the final phase of installation should be completed by Oct. 1. By that time, the number of customer refusals could approach 100, he said.
Because this group will require the continuation of a manual meter-reading route to inspect the old analog meters every month — which goes against the cost-savings concept of installing the remote-read AMRs — CU will face the added expense of fuel, wear-and-tear on a route truck and personnel costs.
Wheeler said he believes the opt-out rate is fair because it accomplishes two objectives. One, it avoids potential confrontations between CU and customers who disapprove of SmartMeter technology; and two, it allows customers who decline the AMRs the option of keeping their old meters provided they pay the additional monthly opt-out rate.
In response to board members’ questions, Wheeler said AMR opt-out rates are in use by utilities in other areas.
“We’re one of the first in the [Tennessee] valley,” he added.
The CU leader pointed out Volunteer Energy Cooperative, which services 17 counties including 17,500 Bradley County customers, does not offer an opt-out rate. However, VEC’s version of the AMI meters does not utilize radio frequency signals. Instead, VEC data is transmitted across existing power lines.
Although the selected AMI meters used by CU and VEC differ in format, they have been installed for identical reasons — billing accuracy, better customer service, lowering costs for manpower and fuel, and lowering the amount of carbon emissions into the air by reducing the number of service trucks needed for manual meter reading.
Also in answer to board questions, CU officials said the handful of customers rejecting AMR technology do so for diverse reasons. Some include concerns about the safety of prolonged exposure to radio frequency signals used by SmartMeters, the same technology used in cellphones, baby monitors, satellite TVs and microwaves. Other reasons are fears about the security of data transmission from the AMRs to Cleveland Utilities, and also that CU could use the technology to control household appliances and energy use. Others have called SmartMeters another advance in the “Big Brother” syndrome espoused in the George Orwell novel, “1984.”
In other developments at Thursday’s CU Board session:
- [Mayor] Rowland administered the oath of office to board member Cartwright who was reappointed by the Cleveland City Council to a four-year term.
- Ken Webb, senior vice president and chief financial officer, said CU will become more proactive in communicating the objectives of Project HELP, a social service program in which utility customers may automatically donate an amount each month on their monthly bill to be used to help Cleveland area families who are struggling to keep their utility bills paid. The program is administered through Neighbors in Need, a division of The Caring Place. Webb said at one time Project HELP had more than 1,000 monthly donors with contributions of about $1,300. Those numbers have now dropped to 504 donors who are giving about $800.
- Approved a change order with O.C. Construction for an increase in the contract amount by $29,535 for the replacement of the roof at the Cleveland Filter Plant on Dry Valley Road. This will hike the contract cost from $114,550 to $144,085. The increase is needed for the removal of the old rubber roof and wet insulation, and the addition of new installation as needed. CU’s investment return will be an improved insulation factor and lower energy costs at the facility.
- Approved a purchase order with Siemens Industry Inc. through Utility Sales Agency in the amount of $75,404 for four 13 kV Distribution Vacuum Breakers and Arc Flash Protection.
- Approved a purchase order with Substation Enterprises in the amount of $241,850 for a substation structure, associated hardware and disconnect switches for the District Substation upgrade at 325 9th St. SE.
- Received a report by Wheeler and Craig Mullinax, vice president of the CU Water Division, that bid approval for the pressure washing and repainting of the exterior of the 1.5 million-gallon Waterville Concrete Storage Tank will be delayed. The initial bids exceeded CU’s budgeted amount so further negotiations with bidding contractors will be needed.
- The CU board’s next formal session is scheduled for Thursday, Sept. 27, at 3 p.m. in the CU training center.
- The CU board will hold a joint session with the Cleveland City Council on Monday, Sept. 24, at 11:30 a.m. in the training center to allow the public utility to update city leaders on the progress and long-term plans for the 10-year, $30 million sewer rehabilitation program which has been dubbed SCOPE 10, which is an acronym for Strategic Commitment to Protect the Environment.”