Monday, May 17, 2010

Post # 17 -- Lessons From Ontario

In the spring of 2004, the government of Ontario announced that 4.3 million homes and small businesses in the province would be equipped with smart meters by 2010. This effort is part of a broader initiative to build almost an entirely new electricity system in Ontario, replacing about 80 per cent of the province’s current generating facilities as they retire over time and expanding the system to meet future growth. (See here and here for more information about the overall Ontario initiative).

But as in California, Texas, and Australia (see Post ## 6, 8, 11, 13, and 15), smart meter roll-outs by Ontario’s Hydro One and Toronto Hydro have not gone smoothly. Many (perhaps most) Ontario customers who have been on smart meters the longest have actually seen their bills increase. This appears to be partly a function of smart meter reporting and data errors by the Ontario utilities similar to those that have plagued roll-outs in other locations. That type of problem – while maddening to customers – at least is correctable. But more significantly, these bill increases seem largely to reflect the stubborn fact, regardless of smart metering's potential to provide consumers with real-time information upon which to base their daily energy use, in the real world most Ontario consumers (for whatever reason) are not changing their behavior.

That reality, which extends beyond Ontario and in many ways remains the smart grid "gorilla in the room," is not just a case of “you can lead a horse to water. . . .” Rather, a key question on the consumer side of the smart grid/demand response equation always has been whether, regardless of their theoretical access to information, consumers (in addition to all the other demands on their time) reasonably can be expected to become energy specialists who are able and willing to reorder their energy use (e.g., do the laundry at 3:00 a.m.; prepare meals at odd hours; become energy procurement experts traders in their spare time).

This is not to say that such a change is either impossible or necessarily undesirable. But to get there will require a lot of heavy lifting by industry stakeholders and a level of consumer acceptance and buy-in that does not presently appear to exist anywhere.

Beyond consumer behavior, Ontario provides another example of concerns driven by smart meter installation -- namely, the issue of consumer privacy and data ownership (see Post ## 4 and 5). Last week, Dr Ann Cavoukian, Ontario’s Information and Privacy Commissioner, issued her Annual Report for 2009. While recognizing the potential consumer and environmental benefits promised by the smart grid, the Ontario Commissioner cautions against sacrificing consumer privacy “amidst a sea of enthusiasm for electricity reform.” The Commissioner states that her “overarching privacy concern is the Smart Grid’s ability to greatly increase the amount of information that is currently available relating to the activities of individuals within their homes — their habits and behaviours.” Her report argues that the Ontario government must ensure that privacy is “embedded” in the electricity reform framework in Ontario.

Again, that is a global concern not just limited to Ontario.

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