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Smart Grid Funding Misspent on Obsolete Technologies, Says New Report

Story at-a-glance -

  • A recent report highlights widespread misunderstandings about the alleged benefits of the new ‘smart’ utility meters among state and local government officials, energy policy experts, advocates for renewable energies, environmental nonprofits, and experts at the highest federal levels.
  • About four billion dollars, yes that is billion with a “B”, in federal subsidies for “smart” utility meters have been misspent with our tax dollars on meter technology that will not lead to energy sustainability, or contribute to the possibility of a more efficient and responsive electricity grid.
  • Other nations, such as The Netherlands, Germany and Japan are properly investing in incentives to rapidly build a sustainable energy economy, while the United States continues to financially prop up coal-based utilities that have no financial incentive to promote energy conservation or movement toward non-polluting, less expensive sustainable energy.
  • The roll-out of wireless “smart” utility meters pose privacy, security, safety, health, financial, homeland security and other risks, in addition to national economic risks by not investing in the right technologies.
  • The American Academy of Environmental Medicine has released a position paper on EMF and radiofrequency health effects, calling for “immediate caution regarding smart meter installation,” citing several studies showing causality that led to its conclusion that “significant harmful biological effects occur from non‐thermal RF exposure,” such as that emitted from wireless smart meters.
  • Communities have been misled about the need for the new meters, in an effort that only serves the short-term bottom line interests of utility and meter companies while burdening ratepayers with an extraordinary range of risks and new costs.

By Dr. Mercola

On November 26, the National Institute for Science, Law and Public Policy (NISLAPP) published a new report entitled "Getting Smarter About the Smart Grid1," authored by Dr. Timothy Schoechle, an engineering and policy consultant with expertise in smart grid technologies.

He currently serves on several international smart grid standard setting committees and has decades of experience in the utility, computer, and communication industries, including being involved in the development of the AMI meter standards and building utility meter reading and demand response gateways.

"Smart meter" is the term used to describe a wired or wireless electrical energy meter that transmits energy consumption data back to your local utility company at regular intervals.

It is replacing conventional hard-wired meters we have had on our houses for decades that only collect usage data and have to be read by some means. However, serious health, privacy, security, homeland security, fire and cost concerns over this technology have been raised, and grassroots resistance groups2 have sprung up in at least 18 different states.

The rebellion against the "smart meters" seems to be uniting people from a range of political persuasions, all expressing common values we share — including the right to privacy, and the right to live and thrive in healthy, safe and secure environments.

Unless there are other motives for the meters, it is hard to understand why our government would be promoting and subsidizing "smart meters," when safer and more secure meter alternatives are available. Former CIA Director James Woolsey even has said that on security grounds alone, the new grid design is "…a really, really stupid grid."

Getting Smarter About the Smart Grid

The featured report "Getting Smarter About the Smart Grid" highlights widespread misunderstandings about the alleged technological benefits of the new 'smart' utility meters, including disturbing misunderstandings among state and local government officials, energy policy experts, advocates for renewable energies, environmental nonprofits, and experts at the highest federal levels.

The report builds the case that beyond privacy, security, safety and potential public health risks of the present smart meters, the very basis on which the meters have been presented to communities may have been misrepresented — as the meters themselves actually have nothing to do, according to Dr. Schoechle, with achieving sustainability, developing a smart grid or even stimulating the economy.

The smart meters, he says, do not facilitate the integration of renewable technologies, or local or 'distributed' power generation, key elements of a 'smart grid' that could support a thriving new energy economy. And, "data to be collected by the smart meters, including intimate personal details of citizens' lives, is not necessary to the basic purpose of the smart grid, such as supply/demand balancing, demand response (DR), dynamic pricing, renewable integration, or local generation and storage, as promoters of the meters, and uninformed parties, routinely claim."

These misunderstandings have unfortunately been perpetuated by media who regularly take industry-affiliated spokespeople at their word, and give the impression that smart meters of the kind being installed today are necessary components of a smart grid. In a PBS News Hour program3 (July 20, 2012), for example, the myth of energy efficiency from smart meters, and smart meters being necessary building blocks for a smart grid, were uncritically shared with PBS audiences, according to Duncan Campbell, Esq. who wrote the Foreword to the new report. Edward Randolph, Director of Energy for the California Public Utilities Commission, said:

"The vast majority of all of the input and evidence is that, you know, society is going to benefit from the smart meters. I mean, the energy-efficiency savings alone in the long term for the state of California is going to be a large economic benefit for most rate payers."

Helen Burt, Chief Customer Officer, Pacific Gas & Electric, stated on the same program:

"Well, a smart meter is really a basic building block of a smarter grid. And a smart grid is being built all over the United States to connect solar power and other pieces of intermittent renewable power into the electric system"

Dr. Schoechle, author of "Getting Smarter About the Smart Grid," however, calls the smart meters being rolled out across the U.S. "a canard — a story or hoax based on specious claims about energy benefits…" He says the right investments for a true smart grid have been delayed by the focus on new meters.

Billions of Dollars Spent on Weakening US Electricity Grid and Economy

There's really nothing smart about wireless "smart" meters. According to the report, billions of dollars in federal subsidies for "smart" utility meters have been misspent on meter technology that will simply NOT lead to energy sustainability or contribute to the possibility of a more efficient and responsive electricity grid.

Furthermore, instead of stimulating the economy, this federal expenditure has cut jobs and delayed urgently needed investments to modernize our electricity grid, including integrating renewable energy technologies, distributed (local) power generation and home-based energy management systems.

As it currently stands, the only beneficiaries of these vast sums are the meter and meter networking manufacturers, while unsustainable Investor‐Owned Utilities (IOUs) are financially propped up.

By law, utilities can charge ratepayers enough to secure a 10-13 percent return on capital expenditures. But the impression of financial viability in these companies may prove to be an illusion — with short-term gains concealing the deeper reality that major structural disincentives and conflicts of interest continue to prevent the U.S. from moving into an abundant, low cost renewable energy economy.

The long-term effects of this mirage will be declining global competitiveness; continued high CO2 emissions; delay in making the needed investments in R&D and in standardization to enable widespread integration of renewables; continued disempowerment of homeowners, who could otherwise be lowering utility bills, and earning money by contributing excess energy into the grid; and the continued misleading of utility company shareholders about the long-term health of their investments.

Since IOU's are paid on a per-kilowatt-of-energy-sold basis, there's no incentive for utilities to encourage energy conservation. Utilities often appear to be catering to their customers' interests in green energy and sustainability, but fundamentally, the truth is it is against their financial best interests to do so. Not only that, but an important point in the new report "Getting Smarter About the Smart Grid" is that integrating renewables actually negatively impacts the economies of scale of large baseload generation coal plants, so even if utilities wanted to add renewables, practically speaking, they can't without increasing their costs of production, costs that get passed along to ratepayers.

Furthermore, utilities actually waste a lot of the renewable energy currently generated by "curtailing" them, in order to protect the bottom line of their investors. Yet naïve environmentalists ignorantly buy into the idea that renewable energy is being implemented. Dr. Schoechle says:

"State initiatives wanting to fulfill the promise of a 30% or higher renewable portfolio standard (RPS) is practically difficult or impossible in a coal baseload system."

Why is US Sacrificing Opportunity to Keep Up with Other Developed Nations?

This propping up of IOU's by encouraging spending on unnecessary meters, so returns are generated for shareholders, can have harsh consequences for Americans over and beyond the fact that it effectively prevents the US from moving toward sustainable energy. While the financial bottom lines of utility companies may benefit in the short-term, the featured report warns that the conflicts of interest inherent in the monopoly utility business model may eventually require utilities to be bailed out by government, and we all know how well that worked out in the not-so-distant past...

Meanwhile, while the US is actively preventing itself from moving toward a renewable energy economy, other countries are already well on their way, or charging full speed ahead — such as the Netherlands, Germany4 and Japan.5, 6

In the wake of the Fukishima disaster (which is still an ongoing debacle), there's been a lot of pressure to shut down the nation's nuclear plants. As a compromise, Japan has passed feed-in-tariffs for renewable energy, and if the Japanese rally to embrace renewable energy sources through this program, it will be politically easier for Japan to shut down their nuclear industry.

Germany Aiming for 100 Percent Renewable Energy

Similarly, according to a recent Truthdig article,7 Germany is aiming for 100 percent renewable energy within the next few decades. They've created strong incentives for the German public to invest in renewable energy, including solar, wind and biomass. For example, the government pays citizens to generate their own electricity by installing solar panels on their home. According to the article:

"The effort to turn more consumers into producers is accelerated through feed-in tariffs, which are 20-year contracts to ensure a fixed price the government will pay... The money the government uses to pay producers comes from a monthly surcharge on utility bills that everyone pays, similar to a rebate. Customers pay an additional cost for the renewable energy fund and then get that money back from the government, at a profit, if they are producing their own energy. In the end, ratepayers control the program, not the government.

... Individuals and cooperatives own 65 percent of Germany's renewable energy capacity. In the US they own 2 percent. The rest is privately controlled. The largest difference... between Germany and the US is how reactive the government is to its citizens. Democracy in Germany has meant keeping and strengthening regulatory agencies while forming policies that put public ownership ahead of private ownership. 'In the end... it isn't about making money. It's about quality of life.'"

Indeed, the issue of energy — the sources, cost, and related health risks — IS about quality of life, yet, as in so many other areas, the US appears to purposely be dragging its feet when it comes to sustainable energy. Dr. Schoechle's review of the present U.S.policy approach to electricity infrastructure (detailed in the report Policy Framework for the 21st Century: Enabling Our Secure Energy Future,8 issued by the National Science and Technology Council (NSTC) of the Executive Office of the President in June, 2011) "evidences a fundamental lack of understanding of the problems associated with the future of electricity and energy."

Schoechle says:

"Overall, the report is disappointingly superficial, myopic, un-critical, and regulatory-centric. Although the report contains some valuable points and some useful topical place-keepers, they are generally not examined in depth or treated with appropriate seriousness.

The NSTC Report's faults are surprising given the resources that such a high level council could have mustered. The listing of resources at the end of the report (and common knowledge about how energy policy is written in Washington) indicates that the report's input is likely to have come largely from industry-related sources and insiders — not the most auspicious approach to find innovative ideas and challenge an entrenched century-old industry paradigm."

More on target was the recent analysis of renewable energy potential for the U.S. by the National Renewable Energy Laboratory (NREL) in Golden, CO, "Renewables Electricity Futures Study".9 It concluded that:

"RE Futures results indicate that renewable generation could play a more significant role in the U.S. electricity system than previously thought and that further work is warranted to investigate this clean generation pathway." It also said: "Renewable electricity generation from technologies that are commercially available today, in combination with a more flexible electric system, is more than adequate to supply 80 percent of total U.S. electricity generation in 2050 while meeting electricity demand on an hourly basis in every region of the country."

Key Summary Points of "Getting Smarter About the Smart Grid"

In short, the $4+ billion federal underwriting of these "smart" meters (which are actually irrelevant to the much broader and more important concept of creating a smart grid) is based on a hoax , as the technology used will NOT take the United States one inch toward sustainability, nor stimulate the U.S. economy, even though that's how the meters are presented and sold.

Key summary points of this important report10 include the following. For more information, please read the report in its entirety.11 You can also listen to the interviews at the top of this page for more in-depth information.

  1. Data to be collected by the smart meters, including intimate personal details of citizens' lives, is not necessary to the basic purpose of the smart grid, such as supply/demand balancing, demand response (DR), dynamic pricing, renewable integration, or local generation and storage, as promoters of the meters, and uninformed parties, routinely claim.
  2. Federal, state and local governments have mistakenly believed that the installation of smart meters will somehow lead to reduction in use of fossil fuels, greater electricity efficiency and long-term energy economy benefits for the U.S. In fact, efforts to further develop and standardize those technologies that could achieve those goals have languished, while investments with stimulus funding have instead been made in technologies that merely serve the short-term economic interests of the utility industry and its suppliers instead of the interests of a true smart grid which could economically integrate renewable technologies and distributed, or decentralized, power generation.
  3. Much of the multi-billion dollar federal subsidy for smart meters does not benefit ratepayers, nor support economic growth, but primarily benefits meter and meter networking manufacturers, while financially propping up unsustainable Investor-Owned Utilities (IOUs). Regulated utilities can charge back their capital investments to ratepayers, with a guaranteed 10-13% rate of return (ROR) on assets, by law. Thus, investors in utilities gain from the smart meter deployment, as they would from any other capital expenditure, while there is no clear gain and significant new risks (privacy, security, health & safety, costs) for the ratepayer.
  4. The allocation of stimulus dollars to subsidize smart meters has also been a net job destroyer, eliminating meter readers and creating manufacturing jobs overseas, while being an egregious waste of federal resources that only supports corporate interests and delays the needed transformation of the electricity grid.

  5. Because Investor-Owned Utilities (IOUs) are paid on a per-kilowatt-of-energy-sold basis, and also receive a guaranteed ROR on assets, they do not have a financial incentive to encourage less energy usage, or to invest in technologies that would help citizens reduce energy consumption.
  6. Because coal plants must run at near capacity to achieve necessary economies of scale, adding renewable energy to the power mix may be in fact cost-additive for utilities, not cost-reducing, and ultimately cost-additive for ratepayers. Thus, there is an inherent conflict between coal-based power generation, the dominant means of electricity generation in the U.S., and a transition to renewable energy technologies that could lead to sustainability. The report recommends the U.S. "move away from dependency on baseload generation, particularly coal, as quickly as possible" to facilitate renewable integration and reach our potential for energy independence.
  7. Despite paying lip service to the public's interest in incorporating renewable energy, as evidence in their marketing materials, utilities actually 'curtail,' or waste, much of the renewable energy now generated in order to protect the economics of investor-owned coal plants. "Getting Smarter About the Smart Grid" explains why state initiatives wanting to fulfill the promise of a 30% or higher renewable portfolio standard (RPS) is practically impossible in a coal baseload system. The paper suggests that decommissioning coal plants, possibly through a public bailout, may be required to move the United States to a renewable energy future.
  8. U.S. policy statements "reflect the mistaken belief that the basic solutions involve fixing or modernizing the existing electricity grid, rather than complete structural transformation of electrical service, which goes beyond particular 'smart' technologies." In reality, shaving peak energy usage by shifting loads may actually increase energy bills as well as CO2 emissions by increasing dependency on coal baseload generation — the most expensive generation there is when considering the totality of subsidies and externalized costs. Increasing baseload dependency will not lower energy costs, as it appears our Administration believes, and it will further obstruct integration of renewable sources.
  9. Expected growth in electric vehicles within a coal-based system will only worsen the nation's baseload dependency, thus making the needed shift away from coal to a renewable energy future that much more pressing.
  10. Leadership in the energy sector is unlikely to come from the top, due to 'regulatory capture,' unless caused by a catastrophic event or consequence. At present, there appears to be little evidence utilities and their regulators want to or know how to make the needed changes to the utility business model, leaving it to the American public, through community-based initiatives and municipalization efforts, to drive the needed change toward renewable technologies and distributed, non-centralized power generation — as is now happening in such places as Boulder, Colorado.

Smart Meters and Electromagnetic Radiation — the Health Crisis of Our Time

Aside from the fact that the current roll-out of smart meters across the United States will effectively prevent us from moving toward safer, non-polluting, less expensive sustainable energy while many other nations are taking progressive action in this area, these wireless meters come with a host of potential health hazards for home owners and their neighbors.

A couple of resources where you can learn more about the many health hazards and other problems related to wireless smart meters include,12,13 and Another excellent resource is the Radiation Research Trust's (UK) report "Smart Meters, Smarter Practices"15 by Dr. Isaac Jamieson, and "Dumb and Dangerous - The Problems with Smart Grids,"16 by science writer B. Blake Levitt and Chellis Glendinning, PhD.

Dr. Dietrich Klinghardt, MD, PhD, among many others, has done much to educate people about the dangers of electromagnetic radiation (EMR). In the following interview, excerpted from the upcoming documentary film, Take Back Your Power,17 smart meters and EMR are referred to as "the health crisis of our time," and in it he explains how electromagnetic fields (EMF) interfere with your biology, and how it contributes to the creation of autism. According to Dr. Klinghardt:

"Based upon a study of 10 autistic cases and 10 normal cases, the pregnant mothers who gave birth to autistic children slept in a location in which microwave radiation was 20.7 times higher, on average, than pregnant mothers who gave birth to non-autistic children."

American Academy of Environmental Medicine Calls for Caution

On April 12, the American Academy of Environmental Medicine (AAEM) released a position paper on EMF and radiofrequency (RF) health effects,18 calling for "immediate caution regarding smart meter installation." The Academy cites several peer ‐ reviewed scientific studies showing causality that led to its conclusion that "significant harmful biological effects occur from non‐ thermal RF exposure," such as that emitted from wireless smart meters.

According to Dr. Amy Dean,19 board certified internist and President of the AAEM:

"More independent research is needed to assess the safety of 'Smart Meter' technology. Patients are reporting to physicians the development of symptoms and adverse health effects after 'Smart Meters' are installed on their homes. Immediate action is necessary to protect the public's health."

The AAEM also calls for:

  • Accommodation for health considerations regarding EMF and RF exposure, including exposure to wireless "Smart Meter" technology
  • Use of safer technology, including for "Smart Meters," such as hard wiring, fiber optics or other non-harmful methods of data transmission
  • Recognition that electromagnetic hypersensitivity is a growing problem worldwide
  • Consideration and independent research regarding the quantum effects of EMF and RF on human health

Opportunities to Intelligently Move the United States Forward

The featured report doesn't stop at simply pointing out the many problems, however. It also presents an alternate plan. In the foreword of the report, journalist and political analyst Duncan A. Campbell, Esq. writes:20

"Dr. Schoechle examines and explains the prevailing confusion about the 'smart grid' and offers a clear path forward, lucidly showing an alternative to patching up our overly complex, vulnerable, and increasingly expensive energy system — thus creating a truly smart and genuinely sustainable electricity system ."

Jim Turner, Esq, Chairman of National Institute for Science, Law & Public Policy, publisher of the new report, and legal counsel to several community groups and state legislators fighting for smart meter consumer opt out options, says:

"We're moving from a centralized to a 'distributed' economy. In a distributed economy knowledge and decision making move increasingly from the center to the periphery empowering citizens in this case, through a 'rooftop revolution,' to lower energy costs and participate in the energy economy. Consumer participation is the core power that a true smart grid, or as I like to call it a 'wise' grid, offers. Beyond the environmental benefits of breaking our over-dependence on fossil fuels, a 'wise' grid offers the opportunity for more efficient and empowering use of energy by consumers leading the way to a much stronger and more economically productive energy market."

"Decentralizing power distribution is part of an evolutionary trend that began when PCs replaced centralized mainframes making computing power available to all. We have seen this movement, as well, in the breakup of the telephone industry, the burgeoning of the locally grown farmers markets, development of the multi-billion dollar natural health market, and the growing mobile applications industry which is transforming the recording, movie and education markets."

"Dr. Schoechle's new report points the way to how federal energy policy can facilitate the democratization of energy generation--allowing the cumbersome and inefficient energy sector of the economy to join the burgeoning consumer driven markets--by investing in the right smart grid technologies. Such investing will ultimately be a boon for our economy including not only for consumers but also for the investors, managers and suppliers of energy to the consuming public. The movement toward a decentralized economy has the potential to be as significant as the industrial revolution. It is in nobody's interest for the energy sector to be left out of this transformation."

Summary of Seven Key Opportunities

In its press release,21 NISLAPP summarizes seven key points presented in the report — opportunities that can help the United States move forward in an intelligent manner:

  1. The U.S. must move away from dependency on coal baseload power generation and toward renewable sources. Renewables (e.g., wind and solar), augmented by flexible "peaking" generation (e.g., natural gas turbines, hydro, etc.) and advanced smart grid supply/demand balancing can completely replace baseload generation.
  2. Free, renewable energy resources must be prioritized and local opportunities for power generation and storage pursued. We must stop subsidizing a centralized, wasteful infrastructure approach that will not lead to sustainability or empower citizens to contribute to the grid.
  3. A clear legal and policy demarcation between customer premises space and utility space must be established. Utilities should not be the sole "gatekeeper" for access to energy applications controlling consumer use, storage, and generation of electricity. As occurred in the telecommunications industry, establishing a clear market demarcation could unleash the creativity and competitive market strength of consumer electronics, appliance manufacturers, homebuilders, solar installers, apps developers, etc.
  4. Develop and standardize distributed renewable integration technologies, in-home devices and smart appliances. The heavy lifting on smart grid deployment is yet to be done. It will require research, engineering, and standardization of new consumer premises equipment and communication protocols to support distributed, variable, and transactive control of electricity generation, use, and storage at the household level.
  5. Localize electric power, using distributed renewable sources, instead of large solar and wind farms where the economies of scale are not significantly greater than at small scale. Localization of power generation avoids the energy loss and environmental and capital costs that come with long-distance energy transmission, keeps money in the community, with a 3.5x multiplier effect, and enhances reliability, responsiveness and grid security.
  6. State legislatures should enable PUCs to fundamentally change the utility business model so it can be sustainable. Utilities must move to a service model that is not based on the present economics of commodity sale of electricity and rate of return regulation (ROR) that encourages unwise capital investments. Generation must be deregulated and separated from distribution, and the customer premises opened up to market competition in products and services for the premises-based generation, storage, management, and use of electricity. For example, some states are already moving to deregulate renewable generation for the charging of electric vehicles.
  7. Local communities must take it upon themselves to understand and obtain the safest and most secure technological options available for utility meters and other smart grid technologies. This education should be gained from independent experts with no vested interests in the present centralized utility paradigm. Wireless technologies should be avoided where safer more secure options exist.

Smart Meters — The Tip of the Iceberg...

According to Camilla Rees, MBA, founder of ElectromagneticHealth.Org22 and the Campaign for Radiation Free Schools,23 and overseer of the smart grid report for the National Institute for Science, Law and Public Policy:

"While smart meters pose privacy, security, health, financial, and other risks, when one looks at this problem through a wider lens, as has been done by Dr. Schoechle in 'Getting Smarter About the Smart Grid,' one sees a far greater problem—one that relates to our long-term national economic prospects, national security and the U.S. contribution to global carbon emissions. And we see what Dr. Schoechle has called a 'canard' or a 'hoax,' and what some might call fraud.

Noise-making over the meters, while completely justified, is the 'tip of the iceberg' under which one finds political and corporate decision making processes gone very wrong.

Serving only short-term financial interests of the utility industry, instead of acknowledging the reality that there is no role for baseload coal generation in a renewable energy future, these myopic, selfish decisions have essentially sold our energy, economic, environmental, health and privacy interests down the river. It is high time citizens insist that the entire impact of technological decisions, in all areas of life, be more carefully considered."

What Can You Do Right Now?

The scenario described in "Getting Smarter About the Smart Grid" by Dr. Schoechle is sobering. Like so many other situations where corporate interests have been put before society's interests, such as in GMO foods, it is essential that citizens speak up. Here are a few things you can do right now:

  • Write to Congress. Citizens for Health, Chaired by Jim Turner, Esq. of the National Institute for Science, Law & Public Policy, has launched a campaign to help citizens communicate with Congress on this matter. It is important citizens ask why Congress subsidized $4+ billion in meters with our tax dollars that serve no good or needed purpose except corporate profits and have the potential to harm our health. Write to Congress at the following DemocracyInAction link.
  • Attend Media & Community Conference Calls. For those wanting 1) to learn more about the present smart meters and the technology needed for a true smart grid, 2) have questions about the risks of the present approach, such as the privacy, security, safety, health, solar flare, homeland security or economic risks, or 3) want to learn how communities might begin a legal process toward energy municipalization, as Boulder, CO has begun, join Dr. Schoechle and other experts on monthly Media & Community Leader Conference Calls. Email [email protected] to receive announcements.
  • Dr. Schoechle's report outlines Immediate, Medium-Term and Long-Term Action Recommendations on Pages 41-43 of the report. Included here are actions that can be taken at the state and local level through appropriate legislation and regulatory policies, such as "deregulation of power generation, local renewable subsidies, net-metering tariffs, feed-in tariffs, solar gardens, efficiency programs, unified and simplified building codes for solar installation, etc."'

    An essential step will also be establishing a demarcation line so that the utility business can be separated into two parts — one that is about the wires and poles, and another focused on the most efficient and safe means of energy generation. These will all be discussed on upcoming Media and Community Leader Conference Calls, Contact [email protected] for the schedule.