Steep price hobbles fast rollout of smart meters

By Myrna M. Velasco – January 28, 2021, 7:30 AM
from Manila Bulletin

The high cost of advanced metering infrastructure (AMI) technology has been hobbling targets of massive rollout of smart meters in the country, because many Filipino consumers would not be able to afford any abrupt technology shift.

According to Jaime Jose Aboitiz, executive vice president and chief operating officer of Aboitiz Power Corporation, their company had done targeted and strategic installation of smart meters in their distribution utility (DU) segments in Visayas and Mindanao, but deployments cannot just be done easily on whopping proportions due to cost considerations.

To compare, he noted that the cost of traditional meter is at P600 per unit; but for the AMI smart meter, this is priced at US$70 to US$100 per unit — and there would still be additional costs for the two-way communication system to be integrated in the meters.

Hence, for the DUs that will be integrating these into their service to customers, the required investments will be massive if done on one-time, big-time approach.

Instead, Aboitiz emphasized that the prudent strategy is to calibrate the rollout of the smart meters in such a way that both the power utility and the consumers will not be unduly burdened financially in embracing such kind of innovation in the power sector.

Senator Sherwin T. Gatchalian, chairman of the Senate Committee on Energy, concurred with the idea of exploring other financial models that could enable smart meter deployments without punishing consumers with one-time, all-in cost in their electric bills for these meters.

“We have to look at other financing models to increase the adoption of smart meters and these type of business models are already being done in other jurisdictions. All we need is to look at these types of business models and allow these types of models to come in, so that the adoption will be faster and consumers will enjoy the possibilities of smart meters,” he said.

Gatchalian said there is no need to push for legislation to underpin the market introduction of smart meters, but he noted that the industry regulator – the Energy Regulatory Commission (ERC) in particular – must craft measures that will either allow the entry of service providers, so these meters will no longer be added as a direct cost burden to the DUs.

For example, he stated that there are smart meter providers who are willing to supply to the DUs, then they will just collect a portion from the electric bills paid by consumers to account for the deployed meters. Gatchalian said in some power markets, the consumers don’t pay the meters one-time, because there are providers who provide leeway for amortized payments. “So instead of the consumer buying the meter; there’s a third party to offer smart meter as a service to the power distributor. Then, the third party will get a portion of your bill. But instead of amortizing the asset, it’s just charging you for the use of the asset,” he explained.