In a process that’s almost as quick as changing a light bulb, Memphis Light, Gas and Water Division electric meter technician Maricco Rhodes pops out an old analog meter on a South Memphis apartment complex and snaps in a smart meter to replace it.
Smart meters, which communicate with the utility while recording consumption, offer several benefits to customers, helping them monitor and manage usage and allowing for quicker response to outages.
But they’ve also had an effect less appealing to customers: helping increase the number of service cutoffs conducted by MLGW for delinquent bills.
During 2017, the utility conducted 129,922 residential and commercial cutoffs, up 29 percent from 100,533 the previous year and a 44 percent increase from the 90,099 reported in 2015.
Why are more Memphians getting their utilities shut off?
Several factors account for the increase, including mild weather last year that resulted in fewer days when MLGW observed a moratorium on cutoffs because of extremely hot or cold temperatures.
But a significant reason for the increase is that smart meters make it much cheaper, quicker and easier for MLGW to disconnect services when customers fail to pay their bills. Instead of sending a truck and employee to manually cut off services — a process that can be delayed by weather and other issues — the utility is able to do it remotely via smart meter.
“The smart meters have really helped us to be able to get to what I call ‘every order, every day,'” said Chris Bieber, vice president, customer care, for MLGW.
If the cutoff figures seem high for a utility that serves about 420,000 homes and businesses, it’s because some customers are disconnected more than once in a given year.
The remote cutoffs have proven controversial in some areas. In Ohio, for instance, a utility seeking authority to remotely disconnect delinquent customers encountered opposition from groups arguing that the practice would violate state regulations requiring customers be given “personal notice” on the day they lose service.
In California, the group called The Utility Reform Network (TURN) contends that remote cutoffs deprive customers of opportunities to negotiate and settle their debts before losing service.
“We saw right away that (smart meters) would make it easier to shut people off,” said Mindy Spatt, communications director for TURN.
The streamlined cutoff process runs counter to the mission of utilities, Spatt said. “Their job is to keep the lights on, not shut them off.”
MLGW: Smart meters lead to cheaper, quicker reconnections
Locally, the trend shouldn’t come as a surprise. MLGW advises on one of its web pages that “smart meters are equipped with a remote disconnect feature that enables MLGW to remotely turn-off service when a customer moves or for non-payment — and to remotely turn-on service upon move-in and upon payment, providing service more quickly and at a lower fee.”
Residential customers can opt out of having smart meters, but only 4 percent or so have done so. MLGW began the switch to smart meters about five years ago. Today electric smart meters have been installed throughout the utility’s service area, although the transition to gas and water smart meters isn’t expected to be finished until 2020.
The grace periods before disconnections are conducted have not changed. Customers with good credit can be as much as 47 days late paying their bills before losing service, while those with poorer credit can go 25 days.
Bieber says customers, on balance, benefit from the remote cutoff and reconnection processes made possible by smart meters.
Reconnecting can be done almost immediately after payments are made, with some 80 percent of customers getting their service restored either the same day or day after a cutoff, Bieber said.
And the fee is $11.44 for remote reconnection, compared to $25 when an employee does it manually. Since October 2016, the lower fee has saved customers a total of more than $3 million — a figure that grows by $200,000-plus every month, Bieber said.
“That’s one of the real big benefits of smart meters,” he said.
The quicker disconnections also mean customers’ debts to MLGW “don’t get out of hand,” Bieber said.
That helps the utility, too, because each year millions of dollars worth of bad debt must be written off. The smart meters have helped slash the amount of bad debt reported by MLGW from $12.53 million in 2014 to $7.74 million last year, a 38 percent reduction.