Friday, October 21, 2011

Post # 82 - New ACEEE "Scorecard" Ranks States' Pursuit of Energy Efficiency

Last year, the American Council for an Energy-Efficient Economy, a non-profit organization promoting energy efficiency, released a study analyzing the results of residential feedback programs spanning over 30 years. ACEEE concluded that smart meters, in and of themselves, cannot be expected to significantly reduce either residential power use or consumer electric bills. Among other aspects, increased energy efficiency is a necessary adjunct.

In a more recent development, ACEEE this month issued its “2011 State Energy Efficiency Scorecard,” a comprehensive ranking of the states based on an array of metrics intended to capture best practices and recognize leadership in energy efficiency policy and program implementation. The focus of the Scorecard is not on smart grid issues, but rather the broader issued of energy efficiency.

States were evaluated in six energy efficiency policy areas: utility and public benefits programs and policies, transportation policies, building energy codes, combined heat and power, state government initiatives and appliance efficiency standards. Among the 2011 Scorecard's key findings:

»Because of continuing economic uncertainty, states are continuing to use energy efficiency as a key strategy to generate cost savings, promote technoligical innovation, and stimulate growth.

»Massachusets has overtaken California in ACEEE's rankings as the leader. Following in ACEEE's "top ten" are New York, Vermont, Oregon, Washington, Connecticut, Minnesota, Rhode Island and Maryland.

»Michigan, Illinois, Nebraska, Tennessee, Alabama and Maryland are the most improved states, with Michigan, Illinois and Maryland significantly increasing utility-sector energy efforts n order to meet energy savings targets established in Energy Efficiency Resource Standards (EERS).

»A total of 24 states have now adopted EERS, which set long-term energy savings targes and drive utility-sector investments in energy efficiency programs. States that adopted EERS policies in 2007 and 2008 are realizing signifigant energy savings and moving ahead in the Scorecard's ranking.

»Total budgets for electricity efficiency programs increased to $4.5 billion in 2010, up from $3.4 billion in the prior year.

»States continue to improve policies to reduce financial, technical and regulatory barriers to adoption of combined heat and power systems, which generate electriciy and thermal energy in an integrated system.

»Twenty-nine states have either adopted or have made significant progress towards the adoption of the latest energy-savings residential and commercial building codes.

»Some states "remain ahead of the curve" in adopting policies to reduce vehicle miles travelled and to promote the purchase and manufacture of energy-efficient vehicles. On the flip side, however, ACEEE finds that over half the states have "minimal or no" policies to encourage energy efficiency in the transportation sector.

Overall, ACEEE concludes that energy efficiency policies and programs continued to advance in 2011. In particular, a group of "leading states remains steadfast in their commitment to the efficient use of energy in transportation, buildings, and industry. . . ." And a "growing number" of states have made progress in the area of energy efficiency -- "some rapidly."

At the same time, ACEEE finds that a wide gap remains between states near the top and near the botton of the Scorecard's rankings.

Sunday, October 2, 2011

Post # 81 - Can Prepaid Services Foster Smart Grid Acceptance by Low Income Consumers?

Unlike most transactions, public utility services are usually paid for only after consumption, measurement, and billing. While prepaid meters long have been available in the United States, they are seen in just a handful of jurisdictions. But as smart meters are deployed across the country, prepayment has been added to the growing list of potential smart meter applications. But, according to the Distributed Energy Financial Group (DEFG), a management consulting firm in the energy sector, that doesn’t necessarily make it an idea whose time has come.

A new DEFG white paper “Low Income Consumer Issues and Voluntary Prepaid Energy Offerings: Perspectives from Three Industry Thought Leaders.”, identifies a number of "core questions":

Is providing a prepayment “option” to payment‐challenged customers contrary to the spirit (and perhaps the letter) of laws prohibiting discrimination in provision of utility services? Do potential negative consequences for some customers appear to outweigh the benefits of prepayment programs? Most consumer advocates answer “yes” to these questions and believe that the introduction of prepayment programs would create more problems than it solves.

At the same time, DEFG states that extensive research in 2010 and 2011 reveals that prepaid energy could be transformational as it is the first customer-facing application of the smart grid. DEFG launched the 2011 Utility Prepay Working Group to further explore leading regulatory and consumer opportunities and challenges presented by prepaid energy. Regulatory issues include disconnect and reconnect policies, weather moratoriums, forms of account notification, cost and benefit allocation, fees and rates.

The white paper addresses two key questions. First, how can a balance be struck between allowing consumers to exercise their preferences and ensuring that adequate consumer protections are in place? Second, how can regulatory rules and practices, including for low income consumers, be revised or updated to allow for innovation and new offerings such as prepaid energy or other new services enabled by smart grid yet maintain the intent of the original regulatory rationale?

The study authors assert that while these issues need to be addressed to implement a prepaid offering for all customers, they present greater concerns when dealing with low-income customers. Consumer advocates argue that prepaid energy invites low-income customers to make tough choices, potentially opting to disconnect electric service to keep money available for other necessities such as food, clothes and gasoline. Yet, existing prepaid customers provide positive feedback, primarily the convenience, flexibility and control that goes with paying any amount at any time. Consumers find that prepayment allows them to budget in a manner most compatible with their lifestyle and income (e.g., make payments weekly or every other week). The authors recognize that there is a tension between the possibilities enabled by new technologies and consumer protections.

The DFEG paper finds certain “broad areas of consensus,” including:

• Prepay offerings should be voluntary and not directed specifically to low income customers but offered to all customers served by utilities.

• Consumer protections do and will exist for a prepaid service offering as they have been in place for post-paid consumers for decades.

• Prepaid service touches the body of bill pay and consumer protection rules and highlights the need to update the regulatory rulebook.

• There is a need to analyze regulatory principles as distinct and separate from the rules and practices that implement those principles, for example, limiting the form of communication for disconnect notifications to letters and/ or a knock on the door may not only be impractical but counterproductive when considering consumer credit issues.


The paper concludes that "a lack of trust among stakeholders has been palpable during the course of DEFG’s research and conference calls around the potential of utility prepaid offerings." While some stakeholders consider prepaid service a positive innovation for consumers, others view it as potentially predatory or discriminatory against low‐income consumers. A particular consumer concern, in this regard, is the possibility using smart meters to facilitate automatic service shut-offs. The paper finds that stakeholders, including utilities, recognize the importance of ensuring that low‐income consumers pay fair rates for electricity and are supported safely during dangerous weather periods. "[T]he biggest barrier to policy solutions. . .[is] trust among [utilities] and consumers."

Saturday, September 3, 2011

Post # 80 - New IBM Study Shows Continuing Consumer Confusion Over Smart Grid

A new IBM survey of 10,000 people in 15 countries – Australia, Belgium, Brazil, Canada, Chile, Denmark, France, Germany, Ireland, Japan, the Netherlands, New Zealand, Poland, the United Kingdom, and the United States – shows that consumers remain confused about what a smart grid is and what it means to them.

Sixty percent of those surveyed did not know the meaning of the terms “smart grid” or “smart meters.” Somewhat inconsistently the study also indicates that more than 50% of respondents still expect the deployment of smart grids and smart meters to foster development of clean energy technologies, and over 60% believe that these technologies will benefit their families. But 50% didn’t understand the term “time of use pricing” – a key concept in the debate on how consumers can benefit from the installation of smart meters (for a link to discussions of time-of-use or "dynamic" pricing, see here) – while 30% were unaware of the basic mechanism used for charging for electricity–the amount paid per kilowatt hour.

Saving money was noted as having one of the highest levels of influence on respondents making changes to their energy usage behavior (62%), though it was no longer the dominating factor. This was consistent with almost all of the countries in North America, Europe, Australia and New Zealand. National economic considerations were important to more respondents (51-55%) than environmental and natural resource considerations (43-51%), although how these two ranked relative to each other differed by age group.

Information sent directly to consumers by the provider (bill and inserts) remained the top reported single influence across all of the countries with more than one-third of respondents using energy bills and inserts to source information about energy costs, environmental impact, and alternative suppliers. However, reliance on traditional media (television, newspapers/magazines, etc.), internet-based sources (non-provider web sites, social media, etc.), and opinions of friends and family in aggregate outweigh the influence of direct-contact sources like bill inserts and provider web sites.

Most of the relative rankings of information sources remained consistent across age groups, but a few notable exceptions emerged. The two most significant age variations were found in the influence of government information sources (ranked fifth among those 35 or older, eighth among those 25-34, and last among those 18-24) and friends and family (fifth among those 18-34, seventh among those 35-54, and ninth among those 55 and over).

More than half of the respondents do not know if their energy provider has a green energy program that is available to them – and almost a quarter of those who participate in green energy programs have no idea if they pay a premium for that power, or how much more they pay. At the same time, customers who were most knowledgeable were 42% more likely to have a positive opinion of local deployment programs underway or proposed, 51% more likely to believe that these programs would bring benefits to their family, and 64% more likely to change energy usage patterns to meet specific goals. Forty-two percent of the respondents are committed to engaging more with their providers to meet their personal goals and objectives, while 33% are not likely to take added responsibility for these decisions in the short to mid term.

Tuesday, August 23, 2011

Post # 79 - New York PSC Smart Grid Policy Statement Highlights the Need for Consumer "Engagement"

Last week, the New York State Public Service Commission issued its “Smart Grid Policy Statement," intended to establish regulatory policies and guidelines for utilities to following regarding the development of smart electric grid systems and associated efforts to modernize the electric grid. The NYPSC hopes that its guidelines will “creat[e] the conditions that will allow optimal technology solutions to flourish.” The policy statement also emphasizes the importance of consumer acceptance.

The NYPSC guidelines themselves, which include customer acceptance but of course cover a much broader area, provide as follows:
* In the short term, utilities are to pursue established and reliable technologies that can provide a relatively certain return on investment. In the longer term, the billions of dollars the federal government has provided for smart grid projects nationwide will generate a significant base of knowledge and experience which, along with further development of smart grid standards, will help identify those technologies that are most effective and efficient.

* Smart grid technologies will utilize a hybrid of both public and private networks. Utilities and communication providers should work together to ensure appropriate use of commercial facilities, and to limit utility capital investments in dedicated communications infrastructure.

* Utilities must provide basic information on smart grid to customers who are largely unaware of this technology. Utilities further must provide a thoughtful and comprehensive customer education plan before commencing with implementation of technologies that require extensive customer engagement.

* Smart grid projects must be able to show demonstrable benefits in excess of costs.

* For most smart grid projects, rate recovery will be addressed through traditional means. The Commission will consider risk-sharing mechanisms for novel or unproven technology.

* Utilities can start to develop smart grid plans and projects using the existing industry standards as building blocks.

* Utilities must develop the capability to build and maintain cyber security standards. Utilities will bear the responsibility to ensure that cost-effective protection and preparedness measures are employed to deter, detect, and respond to cyber attacks, and to mitigate and recover from their effects.

* Utilities and third-party providers must protect customer privacy when projects involve the collection and use of customer data.

With specific reference to customer education and “engagement,” the NYPSC policy statement notes that “a large number of customers do not know how the smart grid works.” Thus, the PSC concludes, one benefit of early customer education may be “to refocus the public dialogue about smart grid, which seems to be centered on smart meters. Some customer concerns may be alleviated if they understand that the smart grid is not just about meters.” The PSC calls on utilities to make customers more aware of the steps they have already taken to develop the smart grid in their transmission and distribution networks.
Before commencing with large customer-centered smart grid programs, utilities must lay the groundwork with comprehensive customer education programs. Such educational efforts can increase acceptance, improve utilization, and ease implementation issues, as well as allowing utilities an opportunity to learn more about the services their customers want and are likely to utilize.

The NYPSC adds that customers participating in such programs need to understand their roles and responsibilities, as well as the role of the utility and any third parties. “An important aspect of smart metering is its ability to enable active participation by customers, but customers must be equipped with the knowledge required to participate in a meaningful way.” Customers will need to be actively supported in getting the right information to make informed decisions on their participation, and in acquiring the necessary knowledge and skills to take advantage of smart meter-enabled programs.

The Policy Statement notes customer education programs must also deal candidly with the rate consequences of smart grid capital investments. The PSC believes that if implemented properly, the smart grid can mitigate cost increases, as well as offer customers more reliable and more environmentally responsible service. “[B]ut customers are wary of further rate increases and will have to be educated to have reasonable expectations regarding the potential of smart grid to lower electric bills.”
Ultimately, the PSC holds, the success of demand response depends on convincing people to change how and when they use electricity:
Clear, concise, and relevant information in advance of a project involving new customer tools, information or interfaces is required to ease customer concerns and improve adoption. Influencing customer behavior requires that utilities and third party providers explain and demonstrate to customers the benefits of a proposed smart grid program.

Thus, the statement concludes, “if a smart grid technology relies on customer involvement in order to provide all or some of the anticipated benefits, any utility proposal to deploy such technology must include a plan for how customers will be engaged and should include an analysis on the expected level of customer participation.”

Wednesday, August 10, 2011

Post # 78 - New Study Has Good and Bad News Regarding Consumers' Attitudes to the Smart Grid

A new study by Market Strategies International, a market research and consulting firm involved with communications, energy and technology issues, finds what it calls good and bad news when it comes to consumer awareness and support of smart grid technologies. In its release announcing the study's results, Market Strategies:
The good news is that a large majority of Americans -- after we give them basic information about smart grid and smart meters -- say it's a priority issue and strongly support the implementation of these technologies by utilities. The bad news is that 72 percent of consumers overall admit they know little about the technologies. Less than a quarter of respondents say they fully understand the concept.

These findings are from the first wave of Market Strategies' on-going 2011 E2 (Energy + Environment) Study. Conducted twice a year, the national survey is designed to gain an understanding of Americans' attitudes and opinions about energy and energy-related issues. The latest version represents the “tenth wave” of this on-going study. A total of 989 interviews were completed May 19 through June 2, 2011 with consumers nationwide. Respondents were recruited via an online panel to reflect key characteristics of the US population. The data were weighted by age, gender, and census region to match the demographics of the US population. (Market Strategies cautions that “due to its opt-in nature, an online panel does not yield a random probability sample of the target population. As such, it is not possible to compute a margin of error or to statistically quantify the accuracy of projections.”).

The updated study finds the level of Americans' smart grid/meter awareness hasn't increased noticeably during the past several years, despite the steady flow of information appearing in media and other outlets. On the other hand, while “general awareness still lags,” Market Strategies believes that “the ready endorsement so many consumers give smart grid/meter -- once it's explained -- speaks volumes about the viability and strong appeal of the technologies and their associated benefits.” Moreover, Market Strategies believes that “it’s important to note that four of the five consumer segments in the energy market support the idea of utilities working quickly towards implementing smart grid/meter technologies." Further, the study finds that “nearly unanimous support for smart grid/meter coming from most of the market's various segments. . . .”

The overall study apparently is not publicly available, beyond what Market Strategies put in its release. Nonetheless, the findings certainly are consistant with with the conclusions of many other studies:
consumer education -- and, more importantly, consumers' belief they will significantly benefit -- will be essential to the ultimate success (or failure) of smart grid development.

Sunday, July 31, 2011

Post # 77 - California PUC Adopts New Smart Meter Privacy Rules

In late 2009. the California Public Utilities Commission (CPUC) ruled that the big three investor-owned utilities in California -- Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric -- would have to provide their customers with real-time residential usage data through smart meters by the end of 2011. Last spring, following extensive stakeholder debate, the CPUC released proposed smart meter privacy rules.

Now, in a decision issued last week, the CPUC issued final smart meter privacy rules. Among other things, the rules require the three utilities to:

1. Provide customers with detailed energy usage, bill-to-date, month-end bill forecast, and projected month-end energy price on their websites – updated daily. Moreover, the information must be available with hourly or 15-minute granularity -- matching the time granularity programmed into a smart meter.

2. Provide "tier alerts" via some form of rapid communication (email, tweets, etc.) when customers move from one price tier to the next.

3. Provide a website calculator to help consumers determine if they would save money by switching to a time-of-use rate

4. Allow consumers to authorize third parties to receive their backhauled smart meter data directly from the utility.

5. Set up a program to roll out home area networking devices to be directly connected with smart meters.

The CPUC said that data on energy consumption generated by smart meters and transmitted by the smart grid will prove critical to future conservation and grid management efforts. The CPUC asserts that enabling consumers and companies to assess and act on this information is key to advancing many of California's energy policies, such as promoting conservation, reducing demand in response to grid events and price signals, reducing summer peak demands, and efficiently incorporating renewable energy and electric vehicles into grid operations.

PG&E, SCE and SDG&E will now have six months to implement the requirements. In the meantime, the CPUC will be exploring whether the new rules should also apply to electric service providers (non-utility entities that offer electric service to customers within the service territory of an electric utility) and community choice aggregators (programs within the the service area of investor-owned utilities that allow cities and counties to buy and/or generate electricity for their residents and businesses).

Thursday, July 28, 2011

Post # 76 - New Electric Industry Study Highlights Benefits of Smart Meters to Consumers--And Need for Consumer Education to Achieve Those Benefits

A new white paper by the Institute for Electric Efficiency (IEE), an organization representing about 70% of the U.S. electric industry—including investor-owned utilities, public power utilities, electric cooperatives, and foreign utilities—finds that for a wide variety of utilities under a range of assumptions, the customer and utility benefits of investing in digital ‘smart’ meters, or advanced smart metering technologies and associated energy management technologies will outweigh the costs.

Co-authored The Brattle Group, an economic, financial and regulatory consulting firm, the paper—The Costs and Benefits of Smart Meters for Residential Customers—quantifies three categories of benefits from smart meters: operational, customer, and societal.

In deriving its cost assumptions, IEE relied on smart meter business cases and equipment manufacturers’ prices, as well as projections and other sources. IEE then used a framework involving different types of utilities and customers to compare smart meter benefits and costs. The framework identified four kinds of utilities defined by real-world factors that influence the overall business case for smart meters, including current generation mix, renewable energy portfolio, regulatory environment, energy prices, and emphasis on efficiency and conservation.

In looking at utility customers, the IEE white paper factored in both how likely they were to be engaged in a utility’s energy programs, and how actively they would manage their energy use. Assuming a service area of one million households, IEE found that the total cost for a utility to invest in smart meters and associated home energy management technologies will vary from a low of $198 million to a high of $272 million.

In looking at benefits, the IEE study found that the smart meter investment will produce operational savings (resulting from avoided metering costs, automated outage detection, and remote connections) of between $77 million and $208 million, and customer-driven savings (resulting from energy pricing programs, in-home enabling technologies, and energy information) of between $100 million and $150 million. The net benefits from investing in smart meters ranged from between $21 million and $64 million for the four types of utilities.

With specific reference to consumer benefits, the IEE study calculates five benefits:

1. Avoided generation capacity costs: This is calculated as the change in peak demand times the avoided cost of generation capacity, and then scaled due to system line losses (assumed to be eight percent) and reserve margin (assumed to be 15 percent). The avoided cost of generation is $50 per kW-year and is based on Brattle’s experiences in this field.

2. Avoided transmission and distribution capacity costs: This is calculated as the change in peak demand times the avoided cost of transmission and distribution, and then scaled due to system line losses and reserve margin. The avoided transmission and distribution capacity cost is assumed to be $10 per kW-year and is based on Brattle’s previous experience.

3. Avoided energy costs: This is calculated as the change in energy in each time period (offpeak, peak, and critical peak) times the cost of energy in the respective time period, and then scaled due to system line losses. The avoided energy costs vary by region and are based on reviews of energy market data as well as Brattle’s prior experience.

4. Avoided carbon dioxide costs: This is calculated as the change in energy use in each time period (off-peak, peak, and critical peak) times the carbon dioxide emissions rate in the respective time period times the value of each ton of carbon dioxide emissions. The emissions rate for each utility differs based on the assumed fuel mix. Furthermore, the value of carbon dioxide emissions is the same for each utility but changes over time with a value of zero until 2016. The value of carbon dioxide emissions is $15 per metric ton in 2017 and increases linearly until 2030 when it reaches a price of $60 per metric ton. (This assumes no national carbon legislation will be in place until after the 2016 Presidential election).

5. Avoided gasoline costs: This is calculated as the change in gallons of gasoline consumed times the price of gasoline (assumed to be $3 per gallon [2011 dollars], a conservative approximation for the national average gas price). This benefit, of course, is only applicable to the customers with electric vehicles. But the authors assert that “the strategy with the potential to achieve the greatest financial impact is to focus on accelerating [electric vehicle] adoption. The benefits of [electric vehicles]. . . are disproportionately high, indicating that even modest increases in [electric vehicle] adoption will have a large impact on benefits.

The study concludes that “the customer-driven benefits could be much greater with more investment in and focus on customer education and engagement.” The IEE document states:

Over the 20 year horizon in this study, most customers migrate from passive engagement in energy management to much more active strategies. This holds true for all utilities types. Hence, a potential area for further study is how to accelerate this process so that a broad array of customers are ready, willing, and able to engage in energy management soon after smart meters are deployed.


In this regard, as in similar studies by other groups (see here, here and here), IEE recognizes the importance of consumer education to achieve consumer buy-in: “Given the high satisfaction ratings of dynamic pricing pilot participants where education is a key component, we believe the combination of program choice based on personal preferences (thereby avoiding opt-in, opt-out arguments) with comprehensive consumer education could yield tremendous financial and societal benefits.”

Tuesday, July 26, 2011

Post # 75 - FERC Holds Off on Smart Grid Rulemaking

In an action with some long-term significance for overall smart grid development, the Federal Energy Regulatory Commission (FERC) last week decided to suspend a rulemaking proceeding on the first group of proposed smart grid technical standards developed by the Commerce Department’s National Institute of Standards and Technology (NIST). FERC took this action based on what it saw as a lack of consensus among electric utilities, telecommunications companies, and equipment manufacturers. FERC thus sends the matter back to NIST), which is the lead federal agency for developing technical standards for the smart grid.

As I have previously discussed, the Energy Independence and Security Act of 2007 (EISA) directs NIST to coordinate the development of a framework to achieve interoperability of smart grid devices and systems, including protocols and model standards for information management. In turn, EISA directs FERC to conduct a rulemaking that would apply to the electricity industry and other stakeholders if it is satisfied that the NIST product has led to “sufficient consensus” on smart grid interoperability standards for the electricity grid.

In August 2009, NIST launched a plan to expedite the development of smart grid interoperability standards. NIST led smart grid stakeholders in a participatory public process to identify applicable standards, as well as priorities for additional standardization activities. In January 2010, NIST released its Framework and Roadmap for Smart Grid Interoperability Standards, Release 1.0, identifying a number of standards that are applicable to the ongoing development of the smart grid. NIST also oversaw the establishment of the Smart Grid Interoperability Panel (SGIP), a public-private partnership providing an ongoing process to support the evolution of the NIST interoperability framework process.

On October 6, 2010, NIST notified FERC that it had identified five “families” of standards as ready for FERC's consideration. FERC then opened a public docket for a possible rulemaking proceeding -- noting, however, that it had not yet made any determination regarding whether there is “sufficient consensus” for the standards. FERC then held a series of technical conferences in late 2010 and early 2011 and soliciting written comments from stakeholders.

FERC now believes that “there is insufficient consensus for the five families of standards under consideration.” In an order issued on July 19, 2011, FERC notes that the commenters were “nearly unanimous” that the agency should not adopt the NIST proposals at this time, citing concerns with cyber security efficiencies and potential unintended consequences from premature adoption of individual standards. FERC thus concludes that “the best vehicle for developing smart grid interoperability standards is the NIST interoperability framework process, including the work of the SGIP and its committees and working groups."

Saturday, July 23, 2011

Post # 74 - Smart Meter Developments in the E.U.

Many European states are investing in smart metering in the drive to meet EU's energy targets to be achieved by 2020. Earlier this month, the European Commission released an Energy Efficiency Directive aiming to achieve the 2020 target of a 20 percent energy saving, with smart metering and billing set to play a key role. The Directive, which presents the legislative framework for putting into place binding measures on energy efficiency, expects that major energy savings for consumers will result from easy and free-of-charge access to data on real-time and historical energy consumption through more accurate individual metering and billing, hopefully to empower consumers to better manage their energy consumption. The Directive is driving member states for 80 percent smart meter penetration by that date.

However, according to Frost & Sullivan, a "a global growth consulting company," region-wise disparity exists due to the different regulatory challenges faced by each country, thus having a direct impact on implementation. The firm's study forecasts 26% growth in Europe, with the UK holding the highest growth potential amongst all the European countries. The British Government has in fact announced plans to install 53 million electricity and gas smart meters in homes and businesses by 2019, while the French energy regulator CRE (Commission de régulation de l'énergie) has set out guidelines with an objective for mandatory implementation requiring all electricity consumers to have smart meters by 2016. Meanwhile, Sweden attained 100% smart meter penetration in 2010 while Italy’s deployment is almost complete with 33.5 million smart meters installed till 2010. On the other hand, no mandatory roll out has been planned in Germany.

Frost & Sullivan predicts that the three hotspots in Europe will be France, UK and Spain, countries that the consulting firm expects to witness high level of growth in smart meter installations in the next 2-3 years. In particular, ‘’[w]ith the UK Government publishing its plans for a mass rollout in 2014, the UK smart metering market holds the highest growth potential amongst all the European countries. According to our research, the UK is expected to witness a 109% growth in smart electricity meter unit shipments from 2010 to 2017.’’

Saturday, June 18, 2011

Post # 73 - New White House Report Identifies "Key Actions" to Empower Consumers in a Smart Grid World

The National Science and Technology Council, a cabinet-level council within the White House tasked with coordinating science and technology policy across the federal government, last week released a new series of smart grid recommendations.

The report, A Policy Framework for the 21st Century Grid: Enabling Our Secure Energy Future, outlines what the NSTC calls “four essential pillars that will enable the United States to transition to a smarter grid”:

1. Enable Cost-Effective Smart Grid Investments: Smart grid technology can drive improvements in system efficiency, resiliency, and reliability, and help enable a clean energy economy through cost-effective grid investments Many of these technologies promise to pay for them- selves in operational improvements, and energy savings The Federal Government’s research, development and demonstration projects, technical assistance, information sharing on technologies and programs, and evaluations provide valuable guidance for utilities, consumers, and regulators about what approaches are the most cost-effective, thereby paving the way for the effective, ongoing upgrade of the grid

2. Unlock the Potential of Innovation in the Electricity Sector: A modernized electric grid promises to be a powerful platform for new products and services that improve grid operations and deliver comfort, convenience, and savings to energy customers

3. Empower Consumers and Enable Informed Decision Making: The success of smart grid technologies and applications depends on engaging and empowering both residential and small business consumers New tools and programs promise to provide consumers personalized information and equip them to make informed energy choices, while ensuring their energy consumption data is accorded privacy protections

4. Secure the Grid: Protecting the electric system from cyber attacks and ensuring it can recover when attacked is vital to national security and prosperity Developing and maintaining threat awareness and rigorous cybersecurity guidelines and standards are keys to a more secure grid.

With respect to no. 3, empowering consumers, the NSTC report identifies a number of “key actions.” The report says that state and federal policymakers and regulators should evaluate the best means of ensuring that consumers receive meaningful information and education about smart grid technologies and options. “Ideally, these efforts will create a track record of transparency and responsiveness, address consumer concerns including data privacy, and clearly explain the opportunities and safeguards that characterize smart grid projects to help consumers make informed decisions.” State policymakers also should continue to consider how to develop policies and strategies “to ensure that consumers receive timely access to, and have control over, machine-readable information about their energy consumption in a standard format.”

Where a utility deploys the relevant infrastructure, the report says that state and federal regulators should consider means of ensuring that “consumer facing devices and applications make it easier for users to manage their energy consumption.” The NSTC notes that types of information and options that smart grid technologies can offer may not be familiar to all consumers, meaning that a simple and usable design may well be crucial to helping consumers realize the promised benefits.

The NSTC states that state and federal regulators should consider, as a starting point, methods to ensure that consumers’ detailed energy usage data are protected and develop, as appropriate, approaches to address particular issues unique to energy usage. The report argues that “consumer trust is essential to the success of smart grid technologies, and protecting the privacy of smart grid related data is one crucial component of strengthening this trust.”

Finally, the NSTC recommends that state and federal policymakers and regulators should consider appropriately updating and enhancing consumer protections for smart grid technologies. “Concerns about data-sharing, new rate structures, and involuntary remote disconnection—namely the impact on privacy, fairness, due process, and costs—raise policy challenges that consumer protection laws and policies may need to address.”

The report itself, of course, does not establish any policy, even for the federal government – and many of its prescriptions in the consumer area are in the regulatory domain of the states and their public service commissions. But it does reflect the thinking within the current administration and follows up on prior Obama administration initiatives designed to promote smart grid development.

Saturday, June 11, 2011

Post # 72 - EDF's Smart Grid Framework

Last June, the California Public Utilities Commission (CPUC) issued an order outlining the requirements for "Smart Grid Deployment Plans" to be filed by July 1, 2011 by California’s three investor‐owned utilities: Pacific Gas & Electric, San Diego Gas & Electric and Southern California Edison.

The CPUC directed that, in preparing their Smart Grid Deployment Plans, the utilities follow a common outline, addressing eight specific topics:
1. Smart Grid Vision Statement;
2. Deployment Baseline;
3. Smart Grid Strategy;
4. Grid Security and Cyber Security Strategy;
5. Smart Grid Roadmap;
6. Cost Estimates;
7. Benefits Estimates; and
8. Metrics

In anticipation of the submissions, the Environmental Defense Fund (EDF), which has played an active role in CPUC smart grid proceedings, last week issued its Evaluation Framework for Smart Grid Deployment Plans, intended (in the words of the EDF's release) "to critically evaluate how effective California public utilities' plans to upgrade the state's outdated electricity network into a digital smart grid will be at delivering environmental and consumer benefits."

EDF recognizes that as PG&E, SDG&E and SoCalEdison develop plans to deploy the smart grid in their service territories, "site‐specific circumstances and considerations must be taken into account." For that reason, EDF states that its evaluation framework does not require that every utility plan engage in every listed strategy or pursue every identified metric. "To a large extent," the documents states, "deployment strategies must flow from individualized smart grid visions that are calibrated to respond to both existing and future conditions." But, with that caveat, the EDF proposes the following evaluation framework, based on five principles:

1. Smart grid deployments should seek to share costs between utilities and consumers, and deliver benefits to consumers commensurate with investments. Smart grid deployment plans should share the investment and technology risk between utilities and their customers, while making sure customers get the full value from the investment, including reduced whole‐system costs and improved reliability, environment quality and public health.

2. The smart grid should empower customers to make choices about their energy use, both to save money and to support clean energy. In general, consumer empowerment is achieved through providing customers with the information, tools and incentives needed to effectively manage on‐site energy production, storage and use. At the same time, consumer empowerment is also supported through maintaining or improving customer equity, protecting consumers from unnecessary financial risks and loss of electrical service, and protecting against loss of privacy.

3. The smart grid should create a platform for a wide range of innovative energy technologies and management services. This platform should enable new technologies and markets without compromising information security.

4. The smart grid should enable and support the sale of demand‐side resources into wholesale energy markets, on equal footing with traditional generation resources. Such demand‐side resources should include energy efficiency, demand response, distributed generation, and storage.

5. The smart grid should deliver environmental and public health benefits. Smart grid cost‐benefit analyses should take into consideration the full range of benefits of deployment, including reduced use of high‐polluting peak power plants and reduced air, water, land and wildlife impacts, for example by avoiding the construction of power plants and transmission lines.

EDF states that it will use the framework to score how well the public utilities' plans will enable the integration of clean energy technologies, empower customers, create a platform for innovative technologies and services, enable demand-side resources to be made available for wholesale energy markets and meet environmental targets set forth in federal and state laws.

Tuesday, June 7, 2011

Post # 71 -- UK Smart Meter Pilot Shows Promising Reductions in Consumer Energy Consumption

General Electric last announced the results of a three month test of smart meters in the English village of North Leigh, stating that the meters allowed the community to reduce its energy consumption by 10% over three months.

The United Kingdom has committed to the European Union’s goal of reducing primary energy consumption of primary by 20% by 2020—the EU's so-called 20/20/20 initiative. Part of the effort to to provide the UK government and British utilities with information to gauge effective methods of influencing consumer behavior to reduce energy usage, the "Challenge North Leigh!” pilot was part of the government-sponsored Energy Demand Research Project (EDRP), a suite of large scale trials across Great Britain. It seeks to better understand how consumers react to improved information about their energy consumption over the long term.

The EDRP is testing a range of methods of providing customers with improved feedback on their energy consumption, including:

-smart electricity and gas meters;

-real-time display devices, which show energy use in pounds and pence;

-more accurate and more frequent bills;

-energy efficiency information; and

-community engagement.


For “Challenge North Leigh!,” Scottish and Southern Energy (SSE)—a Scottish-based utility providing electric service both north and south of the England/Scotland border—provided GE smart meters to the 800-home Oxfordshire community, making the 2,000 villagers some of the first in the United Kingdom to have smart meters installed in their homes. The smart meters gathered data in real-time and communicated that information back to the energy supplier. SSE was then able to present gas and electricity usage information to individual customers. This information was made available to individuals on a website, allowing them to view their energy usage and enabling them to make informed choices to reduce their electricity demand—again, according to G.E., by about 10% over three months.

The full project results have not yet been posted, but “Challenge North Leigh!” points to the potentially positive role smart meters can play in consumers' energy conservation practices.

Saturday, May 28, 2011

Post # 70 - Study: For Many Consumers, Smart Grid Remains an "Empty Vessel"

Last year, EcoAlign, a strategic marketing agency, released a study finding that approximately 70 percent of Americans are not familiar with the term "smart grid."

Now, one year later, EcoAlign has released a follow-up study, Consumer Cents for Smart Grid, that finds that "customer awareness has barely budged over the past year."

EcoAlign conducted 1,000 online interviews in April 2011, with the sample (in the company's words) "balanced to match the U.S. population by age, gender, region and ethnicity." The primary objective was to test consumer perceptions and attitudes in regard to smart grid.

Extrapolating from the online interviews, EcoAlign concludes that only 35 percent of Americans are aware of the phrase “smart grid” in 2011 (compared to 31 percent in its 2010 study).

Moreover, when asked for the first word that came to mind when thinking about “smart grid”, consumers generally had a "largely functional (non- emotional) response." The most commonly mentioned word -- "by far," according to EcoAlign -- was “electricity." Other words and ideas were mentioned at much lower levels, and include “resource management,” “intelligent,” “efficient,” “energy,” “computer,” “energy efficient,” “tracks usage,” “technology,” and “green.”

Based on these responses, EcoAlign concludes that "Smart grid, for many Americans, remains an empty vessel that is yet to be filled with any value or significance."

At the same time, the study suggests that consumers could be sold on those elements of smart grid technology that could lead to lower energy costs.

EcoAlign finds that its respondents were extremely concerned or very concerned about the potential for rising utility bills -- 78 percent in 2011 as compared to 74 percent in 2010. In terms of attitudes towards their personal energy consumption, the most frequently chosen statement was "I am most concerned with saving money on my utility bill" (43 percent).

Among those who would like to receive suggestions from their utility company in terms of how to reduce their bill, they felt that in the short term "smart grid" would be most likely to help improve their utility's service by providing better billing and energy consumption information (34 percent) and more energy management options (30 percent).

Eight out of ten thought it would be extremely or very valuable to find out how smart grid would impact their bill, new pricing options that would give them the opportunity to save money, and what smart grid technology would cost.

While one fourth of consumers would allow the utility to control their high-use appliances automatically, another quarter would like notifications so they can make the adjustments themselves. An additional one third expressed willingness if the price paid was sufficient, while only 16 percent said they would never allow this.

At the same time, when respondents were asked to use one word to describe their biggest concern relative to smart grid, they indicated their top concerns included "privacy," "control/loss of control," "security," and even fear of "big brother." Moreover, when asked who should have access to their detailed energy consumption data, 65 percent responded "only the customer."

Beyond these specific findings, EcoAlign notes that, to date in the smart grid area, the utility industry largely has focused on "deployment and realizing benefits on the utility side of the meter." Going forward, however, EcoAlign concludes that the benefits of "leveraging real-time energy consumption data" can only be achieved if utilities and energy suppliers embrace consumer engagement.

Sunday, May 22, 2011

Post # 69 - Maine PUC Allows Consumers to "Opt Out" from Smart Meters

The Maine Public Utilities Commission last week voted to require Central Maine Power to offer an opt-out program for customers who choose not to have a standard smart meter installed as part of CMP’s smart meter program.

Under the Maine PUC decision, Customers in CMP service territory will have two new opt-out options: the availability of the smart meter with its transmitter turned off and the ability to retain the existing (or analog) meter.

The customer who chooses an opt-out option will pay the associated costs of that option: a) smart meter with transmitter off will carry an initial charge of $20.00 and a monthly charge of $10.50; b) existing analog meter option will carry the initial charge of $40.00 and a monthly charge of $12.00. In order to address concerns of low-income customers, those who are eligible for Low Income Heating Assistance (LIHEAP), will be charged only 50% of the cost of their chosen opt-out option. CMP is required to develop and implement a smart meter opt-out communication plan intended to inform customers about the program during the company’s deployment of their smart meter program.

CMP started installing the advanced meters in the fall of 2010 and about a third of the utility's customers now have them, according to a news report from Maine Public Broadcasting Network. But it didn't take long after the installations began for some CMP customers to loudly protest the meter deployment – in a scenario very much like the backlash against Pacific Gas & Electric in California in and led to a similar state commission-mandated opt out program.

CMP had strongly objected to offering any options, saying they would be costly and dilute the effectiveness of the technology for the vast majority of customers who want smart meters. In the end, the company chose not to appeal the decision and deferred to the PUC, saying it was up to regulators to set the policy for smart meters.

Monday, May 16, 2011

Post # 68 - New CPUC Smart Meter Privacy Rules

In late 2009. the California Public Utilities Commission ruled that the big three investor-owned utilities in California -- Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric -- would have to provide their customers with real-time residential usage data through smart meters by the end of 2011 (to see the order, click here). In addition, the CPUC directed PG&E, SCE and SDG&E to also provide that usage data on a “near real time basis” to companies that those consumers choose to work with.

In a new draft decision, he CPUC has now taken the process a step further by outlining the privacy rules for how that data can be shared and stored between the utilities and other companies that customers choose to work with.

The information they have to hand out includes bill-to-date, bill forecast data, projected month-end tiered rate, a rate calculator, and notifications to customers as they cross rate tiers.

Because the CPUC can’t directly control the third party companies that consumers may contract with, the CPUC created rules for devices that will access the data from the smart meter.

For consumers who want to share their information with an outside company, a utility tariff will require that any home area network device that is “locked” to a certain third party, which will start transferring information from the smart meter, must be in compliance with the CPUC requirements. The utilities have six months to create those tariffs. They also must start a pilot study within six months to provide real-time or near-real-time pricing information to their customers.

For devices that aren’t locked into a particular third party, the utility will be charged with making consumers aware of “the potential uses and abuses of usage data should the customer forward or otherwise provide the data to another entity.”

Although companies such as demand response giant EnerNOC would like data access as soon as possible and argue that existing California legislation provides adequate privacy protection, see here, consumer advocates and others, such as the Electronic Frontier Foundation, are calling for even more stringent measures.

The decision by the CPUC also leaves some ambiguity over what to do if customers pick a device that bypasses the smart meter. However, the easiest (and cheapest) way to get the information will be to go through the meter, so at the end of the day, startups and consumer giants alike will probably choose to take the data straight from the horse’s mouth -- even if it means playing by the CPUC's rules.

Saturday, May 7, 2011

Post # 67 - PG&E Smart Meter Redux: Utility Will Replace Smart Meters, Issue Customer Refunds

In the continuing saga of Pacific Gas and Electric Company's smart meter roll-out in Northern California, PG&E has announced that it will replace a small number of the smart meters supplied by smart meter giant Landis+Gyr due to what the utility terms a "rare defect" in the meters.

According to PG&E, Landis+Gyr has determined the error affects fewer than 1,600 of the two million meters it supplied to PG&E. The utility will replace the meters at no cost to customers and issue full refunds to customers who received inaccurate bills. The average refund will be about $40 per customer. PG&E will also issue a $25 credit for customer inconvenience and offer a free in-home energy audit to affected customers.

Landis+Gyr meters with the defect occasionally run fast when experiencing a narrow band of high temperatures, resulting in a miscalculation of energy bills. The problem, which according to PG&E affects less than 0.08 percent of the smart meters supplied to the utility by Landis+Gyr, was discovered by PG&E's quality assurance program and the advanced diagnostics available through the SmartMeter technology. If any additional meters malfunction, PG&E states that diagnostic signals will flag the meters for immediate replacement.

PG&E will share the technical analysis of the meter issue with the California Public Utilities Commission for its review, and with the American National Standards Institute, which approves the relevant testing standards for the metering industry.

Saturday, April 30, 2011

Post # 66 - DOE Hoping to Fund Smart Grid Consumer Awareness Efforts

The Department of Energy this month issued a "Funding Opportunity Announcement" (FOA) aimed at enhancing "the awareness and knowledge of smart grid attributes and benefits for consumers." The FOA, entitled Smart Grid Consumer Engagement, seeks major involvement in such funded projects by consumer advocacy and community organizations.

FOAs such as this are subject to Congressional authorization, so nothing is definite. But if an appropriation is authorized, DOE envisions two basic types of projects. The first category is "Community-Level Smart Grid Consumer Engagement," expected to establish and carry out smart grid consumer engagement programs targeting all residential electricity consumers within a single utility service territory. Each such program would include three key elements:
(1) Development of research- and facts-based outreach and educational materials on smart grid and its applications and benefits to each segment of electricity consumers.

(2) Distribution of outreach and educational materials through multiple channels and media.

(3) Continuous performance monitoring and data gathering and analysis to gauge the effectiveness and success of consumer engagement against the metrics developed for the program.

The second category is "State-Level or Regional-Level Smart Grid Consumer Engagement," expected to establish and carry out smart grid consumer engagement programs targeting all residential electricity consumers, within a single State or across two or more States, served by two or more utilities.

As noted, DOE envisions a major role in these projects for consumer advocacy groups and/or community groups "with established trust relationships with their constituent residential electricity consumers." Indeed, the FOA specifies that such groups should be either the proposing applicant or a significant team member to the applicant.

DOE also suggests that project participants include (in particular) utilities, technology/application vendors, state and local governments. While, along with consumer advocacy and community groups, such stakeholders would be considered "preferred," other stakeholders could include firms or institutions with expertise in advertising/promotion, public relations, marketing, educational materials, and delivery through multiple-channel communication.

Sunday, April 24, 2011

Post # 65 - A New Consumer Rating System

The Galvin Electricity Initiative, a non-profit organization founded by former Motorola CEO Robert W. Galvin to promote "microgrids" (see Post # 45) has developed a ranking and recognition program for smart microgrid projects intended to encourage innovation in the electricity industry by emphasizing consumer needs.

Microgrids are small-scale versions of the centralized electricity system, generally, low voltage distribution networks with distributed energy sources. The Galvin Initiative’s new program, the Perfect Power Seal of Approval, will rank projects based on performance in the key categories of reliability, consumer empowerment, efficiency and environment, and cost.

The rating system was developed in collaboration with an advisory committee of professionals in several sectors, such as power distribution, environmental advocacy, utility benchmarking, green buildings and product safety. The committee uncovered precedence for each of the new metrics but found that until now, they have not been combined to form a comprehensive picture of electricity system performance from a consumer perspective.

The new program is based on the U.S. Green Building Council's LEED certification for buildings. The Galvin Initiative is working with Underwriters Laboratories, Inc. to train and certify evaluators. In a pilot phase, the program will test the beta version of the rating system by evaluating a select group of projects. Beyond the pilot phase, the program will expand to additional types of projects with the help of a broader stakeholder process.

Sunday, April 17, 2011

Post # 64 - New Study Suggests Consumers May Be Ready to Look Beyond Traditional Utilities With Respect to Smart Energy Services

According to a recent report by Accenture, the global management consulting firm, most consumers would consider getting electricity and energy efficiency products and services from sources other than their electric utilities.

The Accenture report, Revealing the Values of the New Energy Consumer, provides the results from a survey of 10,199 consumers in 18 countries. Accenture reports that that 73% would consider buying electricity and related products and services from a company other than their local electric utility. More than half (59%) would consider buying from product retailers, and 49% from cable/phone companies and 45% from online sites and brands.

When considering the purchase of energy-efficient products such as smart thermostats, 54 percent would opt for their electricity supplier, 50 percent would consider buying from retailers, 32 percent from online sites and 22 percent from cable/phone companies. At least 90 percent of respondents in China, South Africa, South Korea, Singapore and Brazil would buy electricity, energy efficiency products and related services from non-traditional electricity providers, compared with 23 percent in France, 50 percent in Belgium and 59 percent in Germany.

The report also says 57% of consumers surveyed would use an electricity management program even if it didn't cut their utility bills – and that almost a third would pay a little more. While cost is an issue, consumers are getting more interested in the convenience of automated energy management and mobility, like being able to download apps on their mobile phone to keep track of their energy use.

Among Accenture's other findings: 60 percent of respondents would be interested in technology that can completely automate the management of their electricity. Thirty-five percent would install a smart device that automatically turns on or off pre-selected appliances, a ‘set and forget’ program. more than a third would be interested in monitoring and managing their usage through personal electronics (36 percent). Thirty-five percent would be interested in the ability to customize the design of the in-home display or the online portal of their electricity management program. Mobility is important with almost a third (32 percent) of consumers interested in applications they can download on their mobile phone to measure their consumption in real time.

At the same time, Accenture found that Consumers exhibit a strong preference for face to face contact when purchasing energy-related products and services. When buying energy-efficient products, such as smart thermostats, 52 percent of respondents say they want to make a purchase with a staff member in a store location. Only 29 percent would be happy purchasing online without interacting with staff. When buying a "set and forget" energy program, 63 percent would want to purchase from a staff member either in store or at their home.

Accenture's basic conclusion is that utilities will to, in effect, "retool."
Utilities/electricity providers must focus on not only understanding how energy savings influence the decision to adopt a program, but also on building and managing programs that cater to many different needs and values. This means developing innovative offerings that blend the optimal mix of attributes, such as loyalty rewards and installation services. As a result, the traditional commodity service may no longer be at the heart of utilities’/electricity providers’ offering set, but just one component of a whole range of services making up the entire product offer.

Accenture finds that utilities/electricity providers still maintain "a trust advantage with energy consumers when compared to other commercial providers." Nonetheless, Accenture warns that to the extent that consumers are willing and able to purchase energy-related products and services from a broad set of providers, utilities and electric provides will have to reevaluate their marketing strategies.

Sunday, April 10, 2011

Post # 63 - Two New Reports Highlight the Benefits (and Costs) of Smart Grid Development

The past week saw the release of two major studies that emphasize both the benefits of fully implemented smart grid technologies and the costs of implementation.

First, and from an international perspective, a new report from the International Energy Agency (IEA), an autonomous organization of 28 member countries (including the U.S.) created to pursue reliable, affordable and clean energy initiatives, says that widespread smart grid deployment can play a significant role in enabling nearly all clean energy technologies, including renewables, electric vehicles and energy efficiency.

The IEA report, Smart Grids Technology Roadmap, provides a consensus view from more than 200 government, industry, academia and consumer representatives on the current status of smart grid technologies, and charts a course for expanding their use from today to 2050. As well as addressing current concerns with existing electricity systems, such as ageing infrastructure and increasing peak demand, the IEA report highlights smart grid technologies as important elements for expanding the use of a number of low-carbon technologies, such as electric vehicles. The report also outlines the potential for smart grids in rural areas of developing countries further down the line. Small "remote‟ systems - not connected to a centralized electricity infrastructure and initially employed as a cost-effected approach to rural electrification - could later be connected easily to a national or regional infrastructure. Further, smart grids could be used to get electricity to sparsely populated areas by enabling a transition from simple, "one-off" approaches to electrification (e.g. battery-based household electrification) to community grids that can then connect to national and regional grids.

IEA recommends greater international collaboration in sharing experiences of pilot programmes and in leveraging national investments in the development of required technology. It also stresses a need to develop common standards between countries that will help optimise and accelerate both the development and deployment of necessary technology while at the same time, reduce costs for all stakeholders - governments, industry, and the public.

But, as a second (and pro-smart grid report) indicates, there is a price tag. The Electric Power Research Institute (EPRI), an independent, non-profit company that conducts research and development relating to the generation, delivery and use of electricity, has just released a broad assessment of the costs and benefits to modernize the U.S. electricity system and deploy smart grid technologies.

The EPRI assessment, Estimating the Costs and Benefits of the Smart Grid, factors a wide range of new technologies, applications and consumer benefits the investment needed to implement a fully functional smart grid ranges from $338 billion to $476 billion and can result in benefits between $1.3 trillion and $2 trillion.

EPRI's estimate reflects new technologies related to the grid, information, and communication technologies; market structures; demands of an increasingly digital society; more widespread deployment of renewable power production and its integration into the grid; expansion and maintenance of existing infrastructure; and technologies and systems to address grid security. The report balances costs with benefits, which include: (1) more reliable power delivery and quality, with fewer and briefer outages; (2) enhanced cyber security and safety with a grid that monitors itself and detects and responds to security and safety situations; (3) a more efficient grid, with reduced energy losses and a greater capacity to manage peak demand, lessening the need for new generation; (4) environmental and conservation benefits, better support for renewable energy and electric-drive vehicles; and (5) potentially lower costs for customers through greater pricing choices and access to energy information.

The analysis updates EPRI's 2004 EPRI assessment, which estimated the cost of implementing a smart grid at $165 billion. The updated analysis assumes steady deployment of smart grid technologies beginning in 2010 and continuing through 2030.

Sunday, April 3, 2011

Post # 62 - Consumers Still Sketchy on What the Smart Grid Is.

A new survey says most consumers who are aware of smart grid technology only somewhat understand it and what it does.

The survey, prepared by the NAHB Research Center for appliance giant Whirlpool Corporation and Habitat for Humanity International as part of their joint global housing initiative, says that 70% of consumers who know about the technology are pretty shaky on the details. In addition, only 43 percent of all consumer respondents indicated they know what Smart Grid technology is, although the number was greater for respondents in the upper middle (63%) and high-income (57%) segments.

The survey reported opinions from consumers and builders on topics related to green home building. The consumer portion of the survey also showed that of all Smart Grid-aware respondents, only 35 percent believe their community somewhat understands Smart Grid technology. A total of 46 percent of the same segment said they feel their community does not understand the technology at all.

The builder portion of the survey showed a similar perception of consumer knowledge on the subject. Of all Smart Grid-aware respondents, 62 percent said that they believe homeowners do not understand Smart Grid technology at all. Smart Grid-aware builder respondents generally felt more confident with their own knowledge of the technology, with 79 percent answering that they at least somewhat understand how it works. A total of 51 percent of Smart Grid-aware builder respondents noted that they believe the home building industry as a whole understands how the technology works.

On the plus side, at least from Whirlpool’s point of view, 48 percent of Smart Grid-aware respondents to the consumer portion of the survey indicated that Smart Grid-compatible appliances will be very important to green homes. In the builder survey, 64 percent of Smart Grid-aware respondents said these appliances will be at least somewhat important to green homes in the future.

Saturday, March 26, 2011

Post # 61 - PG&E Files Smart Meter "Opt-Out" Proposal

In response to consumer concerns about health risks from exposure to radio frequencies and radiation from wireless smart meter devices – and under heavy pressure from California regulators, see here and here – Pacific Gas & Electric Company last Thursday submitted a smart meter “opt-out” proposal to the California Public Utilities Commission. The PG&E proposal would allow the utility’s gas and electric customers to have the device's communications system turned off – but it will cost them more money for their power.

Under PG&E’s plan, which still needs CPUC approval prior to implementation, the utility is proposing upfront and monthly charges to offset the cost of disabling the meters, employing meter readers and changing its information technology system. The utility would charge customers a $270 upfront fee, plus a $14 monthly charge or an increase in gas and electric rates, or a $135 upfront charge and a $20 monthly fee or increase in rates. The fees would be discounted for low-income customers who qualify for PG&E's CARE program.

In a prepared statement, Greg Kiraly, PG&E’s Vice President for smart meter operations, said:

We believe this proposal addresses concerns some customers have about [smart meters] while still delivering the many benefits of [smart meter] technology to the majority of customers. The overwhelming weight of scientific evidence assures us that the low-level Radio Frequency signals from our [smart meters] are safe – in fact, even safer than many household products, including cell phones and microwave ovens. But we know some customers nevertheless have concerns about the meters and we take those concerns seriously.

But many PG&E customers remain convinced that smart meters are hazardous to their health. They are not likely to be happy with covering any PG&E smart meter costs – particularly (and ironically) “opting out” costs.

In any event, PG&E remains at ground zero in the smart grid wars.

Wednesday, March 16, 2011

Post # 60 - Some Validation for D.C. Pilot Program

The National Action Plan Coalition (NAPC), a coalition of non-profit organizations in the utility, smart grid, regulatory, energy efficiency, environmental, and consumer advocacy areas, has issued a case study examining the PowerCentsDC pilot program in the District of Columbia. As I’ve previously posted, PowerCentsDC involves smart meters and a number of different demand response options.

The NAPC was formed to formed to implement the National Action Plan on Demand Response issued last year by the Federal Energy Regulatory Commission and the U.S. Department of Energy. The new NAPC report, PowerCentsDC: A Model for Stakeholder Collaboration, states that the DC pilot was unique because “various stakeholders—including consumer advocates, regulators and the local utility—joined together from the beginning to design, plan and implement it. Early education and involvement of stakeholders has become a high-priority issue in the [Demand Response] and Smart Grid sector according to most experts in the field.”

NAPC also states that the case study represents an alternate way to interpret specific a demand response or smart grid activity after it has taken place. Instead of focusing on the quantified results, the NAPC focused a narrative version of how the effort went from start to finish. In addition, the case study enables readers to identify best practices.

Saturday, March 5, 2011

Post # 59 - Austin (Smart Grid) City Limits

The Pecan Street Project, a smart grid and clean energy research and development organization headquartered at the University of Texas at Austin, last month completed systems installation and has gone live with the first phase of its smart grid demonstration project in Austin’s Mueller community. The project seeks to expand and develop smart grid system's in the Texas capital though a customer-oriented approach that often has been missing in utility smart grid roll outs.

Pecan Street's board includes representatives from UT Austin, Austin Energy (the local utility, which already deployed 400,000 smart meters), the Environmental Defense Fund, the Austin Technology Incubator, the City of Austin and the Greater Austin Chamber of Commerce. The new project itself has been deployed by Incenergy LLC, Austin-based Smart Grid software company.

Pecan Street's new home smart grid systems, which capture minute-to-minute energy usage for the whole home and six major appliances or systems, are deployed in 100 homes at Mueller, all of which are green built and 11 of which have rooftop solar PV systems (photovoltaics (PV) is a method of generating electrical power by converting solar radiation into direct current electricity).

This spring, Pecan Street Project will deploy Incenergy systems in a second group of 100 homes outside Mueller that are at least 10 years old. All participants in both groups are volunteers. The project achieved an installed cost per home of $341 ($241 for equipment plus $100 for installation).

During the 12-month first phase, project researchers will learn about how homeowners use electricity, gas and specific appliances during the course of the day. This will mark only the second publicly-reported research on the daily energy profiles of Sunbelt homes (the other is a 1999 University of Central Florida study) and the first to incorporate data on output from rooftop solar panels and on the homes’ energy efficiency attributes.

In Pecan Street's announcement for the the rollout, executive director Brewster McCracken noted:

The customer will have final say about whether the smart grid is a smart idea. The truth is that we – those working on and advocating for the smart grid – need to learn a lot more from customers than they need to learn from us. Before anyone starts prescribing solutions, we must develop a much better understanding of what customers value and how they’re using energy now.

Together with selected companies, project researchers will use the information gathered from these homes to structure next generation home smart grid systems. These systems, which selected companies will deploy in the project’s second phase (beginning March 2012), will provide customers with the ability to manage – even over mobile phones – individual appliances and systems as well as electric vehicle charging and rooftop PV systems.

The installation and testing of these next generation technologies will take place in a larger group of up to 1,000 residential and 75 commercial customers. As with the first phase, all participants will be volunteers. Pecan Street Project will issue a Request for Information on February 15, 2011 for companies to deploy home energy management systems and to supply electric vehicles, in-home charging and rooftop PV systems.

This looks like a promising project. And it can provide a real test of utilities' ability to integrate consumer preferences into the smart grid.

Saturday, February 19, 2011

Post # 58 - Xcel's SmartGridCity: Boulder, We Have a [Written] Decision

Following up on my prior posts (see here and here), the Colorado Public Utilities Commission finally released its written decision reducing $14.8 million in cost recovery from Xcel Energy SmartGridCity project in Boulder. The CPUC took this action despite a prior settlement, approved by a CPUC administrative law judge, that would have provide for cost recovery of $44.5 million.


Early last month, at its regularly monthly meeting, the CPUC voted to drastically reduce the cost recovery approved by its judge -- but t has taken a while for the agency to issue a written decision.


The written decision finally appeared about one month later. The CPUC criticized Xcel for failing to "articulate and defend a strategic plan for the use of SmartGridCity investment." The CPUC also expressed concern of whether the projected benefits would be actualized.


However, the CPUC will allow Xcel to recover $14.8 million upon demonstrating “the credible promise of consumer and utility benefits” and “the ability of customers to make practical use of [SmartGridCity] on their side of the meter through in-home devices.” But the CPUC wants to see a "robust" plan created with input from "academics, researchers, and customers."


Once again, a utility learns that customer buy-in for smart grid project -- especially smart meter projects -- is esential.