Small business owners may start to notice changes on their electric bills, if they haven’t already, due to recent meter changes made by Southern Maryland Electric Cooperative.

In some cases, monthly bills may increase, while others may decrease or show no change at all, depending on the “load factor” of the individual business, SMECO spokesman Thomas Dennison said.

About a year and a half ago, the meter change, which only affects small commercial customers, received approval and SMECO has been gradually changing customers’ meters to come into compliance with the new rate design.

Prior to the change, small commercial customers got a free pass for the first 25 kilowatts on their bills. Now those kilowatts are billable, but to compensate, SMECO lowered the customers’ energy charges to offset it.

The demand charge is a measure of a customers’ contribution to SMECO’s peak load during a 15-minute interval, SMECO CEO Austin J. Slater Jr. said, adding, “We use demand because it’s a better indicator of the facilities we have to build to support every individual customers’ demand on the system. If you use very little every month but have a big peak, we still have to build facilities to meet that.”

Slater said the changes were necessary because some SMECO customers were paying more than they should while others paid less and the company needed a better tool to measure individual energy use. “We became more precise in the allocation of costs,” he said.

“The result was to try to remain revenue neutral,” Dennison said, by including the corresponding drop in energy charges. Depending on how much energy a business uses during peak loading intervals, “it would result in a slightly higher bill” for some customers, he said.

Kenneth Springs, owner of Small Open Boats in Port Republic, was one of those customers. According to Ken Capps, SMECO vice president of engineering and operations, the new technology was applied to Springs’ business meter in December.

On his December bill, Springs noticed his charges had nearly doubled from $40 to $80, and that sent him on the hunt to find out what had happened.

“I’ve done so much work on this,” Springs said. “It affects all small commercial business owners.”

Springs said he understands the rationale behind SMECO’s meter changes “and it makes sense to try and even out the loads, but this has got me very upset.”

In his smaller shop “all I have are fluorescent lights, a refrigerator, a coffee pot and a heating system,” he said. “I happened to turn on the coffee pot at the same time as the heat came on and it cost me 20 bucks.”

In his larger shop, he has various machines. “You don’t know what’s gonna happen there. It’s a kind of roulette,” he said. “It introduces uncertainty into our budget. If we’re competing with a shop outside the SMECO area, like up in Annapolis, they don’t have this charge. To absorb the cost, we’ll have to raise our prices. ... Maybe it never occurred to [SMECO] the effect this change would have on users.”

Dennison said SMECO is willing to work with business owners like Springs on trying to lower their monthly costs by taking advantage of various programs and incentives offered by the utility company, which can be found at www.smeco.coop/save/business/index.php.

“We have a ‘business solutions’ link we encourage customers to take a look at,” Dennison said. “We can retrofit existing equipment. We also have rebates for high-efficiency appliances used.”

Linda Vassallo, director of Calvert County Economic Development, had no knowledge of local businesses being affected by the meter change. “I have not heard of any major complaints coming out of the business community,” she said.

Calvert County Commissioners’ President Gerald W. “Jerry” Clark (R), a Solomons liquor store owner, said he’s always used a demand meter and hasn’t seen any abnormal increases on his bills lately. “If anything, these last six months or so they seem to be a little better than they’d been,” Clark said. “I can honestly say here in my stores the bills seem to be a little less burdensome than they were in 2010. I mean, it’s not a huge difference. It’s not like open-the-bill-and-fall-out-of-my-chair different.”

After browsing through some businesses’ accounts, Dennison said a handful of small grocery stores and restaurants in the Lexington Park area and a liquor store in Prince Frederick saw lower bills already “because they have a good load factor.”

But the meter change for small commercial customers is just a start. Currently SMECO is monitoring a pilot test for new “smart meters,” a new wave of energy measuring. More than 1,000 customers at Patuxent River Naval Air Station and 894 customers — a mix of commercial and residential — in the Waldorf area are participating in the pilot, and so far meter reads show a 99 percent success rate, Slater said. Eventually, once they receive Public Service Commission approval, all SMECO customers will be switched to smart meters.

“Those will be able to do a lot more things in terms of helping customers monitor their uses,” Dennison said. “Customers will be able to have more data and more autonomy over their energy usage.”

At some point, SMECO plans to create an online portal where customers can log on and see what their exact energy usage is for certain intervals of time, and they also will be able to enroll in various rate plans that offer benefits to those who use less electricity during peak load times. “It’s a technology and a program that’s really being embraced by the industry,” Dennison said.

But the biggest improvement, Slater said, is that SMECO will be able to monitor the smart meters remotely, instead of sending crews out to people’s homes and businesses, and can respond to power outages and problems more quickly.

During the few months the pilot program has been operating, SMECO has avoided sending crews out 180 times, Capps said.

mrussell@somdnews.com