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.

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.

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.

Post # 57 - Is Smart Grid Development Hindered by a Energy "Literacy Gap" Among Consumers?

The Smart Grid Consumer Collaborative (SGCC), a non-profit organization consisting of consumer and environmental advocates, technology vendors, research scientists, and electric utilities interested in promoting Smart Grid develpoment, recently released its "2011 State of the Consumer Report."

Building on a series of SGCC-sponsored focus groups last fall, the report examines consumers’ attitudes toward their electrical needs and smart grid initiatives. Among the major findings:

• There exists an energy "knowledge gap" in the United Staets, with few "energy literate" consumers. The report finds that "only a small percentage of consumers have knowledge or awareness of how power is generated and distributed." Moreover, among those who have heard of Smart Grid, "few have an accurate understanding of its meaning or the implications of failing to modernize the grid."
• At the same time, concern over climate change, energy security, and global competitiveness have made more consumers receptive to learning about energy. But consumer interest "is centered on relationships, financial arrangements, and usage, rather than deep technical understanding of electricity and the delivery system."
• Personal values and priorities more accurately define consumer segments than factors such as age or income -- suggesting that consumer motivations are more predictive of a willingness to adopt smart energy practices than traditional demographics.
• Multiple pilots show that the combination of price signals and feedback devices results in significant behavior shifts. For maximum impact, options and interfaces must evolve to meet the needs of less technically-oriented consumers.

Not surprisingly for a stakeholder organization committed to promoting consumer acceptance of the the Smart Grid concept, the SGCC report focuses on consumer education and outreach -- and outreach focused on realistic view of consumer attitudes.

In other words, "requests to change or modify [consumer] behavior must come from [consumer] perspectives." Consumers’ varied views of the benefits of Smart Grid "do not always align with utilities, technology vendors, or the formal positions of consumer advocates." Thus, SCGG calls for more research to clarify where the similarities and differences exist. And utilities will need a portfolio of programs and pricing options to meet the needs and priorities of their customers:

"While some will be motivated by comparisons with the neighbors, others will find those reports unfair. Price nudges matched with the right technology will be the compelling motivators for still others. Simple choices, that are not overwhelming, will allow consumers to pick what works for their families."

The study finds that consumers do see value in operational benefits and increased reliability, but utilities have not always focused on explaining thiese benefits from the public’s perspective. Thus, when consumers are asked to pay for grid enhancements, they (not unreasonably) "expect visibility as to how they would share in or benefit from significant operational savings." The report concludes that, while attempting to quantify consumer attitudes is valuable, "it is always good practice to speak directly with consumers whenever possible."

That last point may seem both obvious and a truism. But as readers of this blog will attest, the failure of utilities to communicate with their customers -- more than any "literacy gap" -- probably is the key explanation for widespread resistance to the Smart Grid concept among utitility customers. The SGCC report clearly is a reflection of -- and an attempt to respond to -- that reality.

Post # 56: Xcel's SmartGridCity -- Moving Right Along?

My most recent post on Xcel’s SmartGridCity project in Boulder was last fall. At that time, Colorado’s Office of Consumer Counsel (and other parties) appealed a decision of a Colorado Public Utilities Commission administrative judge that would have allowed Xcel to recoup approximately $45 million in installation costs from retail ratepayers – about three times the company's original estimate. See Post No. 50.

The CPUC acted on the appeal a little over two weeks ago – but, interestingly, not in writing. The Denver Post, which apparently was the only publication presented present, reported that, at a January 5, 2011 meeting, the CPUC “sliced by 38 percent the $13 million a year the utility is charging customers for the Boulder-based pilot program.”

Because I don’t like to post about agency decisions I have not read – and because the CPUC normally issues written decisions within a week or so of its meetings – I held off posting. And I assumed the written decision would be available within a few days.

Well, I was wrong. As of today, the CPUC still not issued its decision, which is pretty unusual based on my understanding of its procedures. I don’t want to speculate on the reasons, and I will hold to my policy of not writing about orders that I haven’t read. But I figure at this point I should at least post a link to the Denver Post article, just to be current.

Perhaps some policy pronouncement is on the way. Anyway, presumably we will see something soon.

Post # 55 -- Smart Meter Privacy Remains a Major Concern

IDC Energy Insights, a Massachusetts-based research and consulting firm, has released a new study – Utility CIOs: Living in a Smart Grid World – presenting results from a survey of "North American utility executive IT leaders." While generally focussed on the role of IT specialists in their companies' smart grid initiatives, the study (summarized here) shows that privacy fears remain in the hearts of many utility customers.

Indeed, according to the survey, privacy has emerged as the number one concern related to data security and management, with data governance as an emerging concern. As utilities implement new initiatives such as smart metering, data volumes are expected to increase significantly. While management and integration of this data are themselves priorities, IDC's respondents overwhelmingly reported data privacy as the key element of IT strategic plans for security. In particular, the study found that customers have a great deal of concern about how their data is being used and distributed.

Beyond the issue of privacy, IDC finds that most utilities have an strategic plan for information technology that takes smart grid into account. However, and surprisingly, one third of the utilities surveyed stated that their IT departments are not involved in developing business cases for new initiatives such as renewable generation, energy efficiency, smarter distribution grids, and smart metering. In fact, in the case of 13% of utilities, IT does not become involved until the project is well under way.

On wonder whether this lack of upfront engagement by utilities with their IT professionals -- which in a curious way mirrors many utilities' lack of upfront engagement with their customers on smart grid issues -- is the cause of at least some of the difficulties utilities have encountered when trying to convince their customers (and regulators) of the benefits of smart meters and other smart technologies.

Post # 54: A California Smart Meter "Opt-Out"?

In one of the latest examples of consumer-driven push back against smart meters in California (see, for example, here and here), California Assembly member Jared Huffman (D-Marin County) last week introduced a legislation (Bill AB 37) that would enable consumer to decline the smart meter installation.

According to Mr. Huffman’s statement on the proposed legislation, Bill AB 37 directs the California Public Utilities Commission to provide an “opt-out” alternative for customers who do not wish to have a smart meter installed – and to require that utilities make this option available using “wired technology that provides equivalent smart grid reliability and efficiency.”

The opt-out “alternative,” however, is not defined in the bill. Rather, AB 37 directs that by January I, 2012, the CPUC must identify alternative options for customers that decline smart meter installation and “ensure that these options are made available to customers.”

The bill also directs that utilities disclose the timing, magnitude, frequency and duration of radio frequency (RF) emissions. Finally, AB 37 directs that the CPUC temporarily suspend smart meter deployment until this opt-out alternative is in place.

In his statement, Mr. Huffman says his bill “is about giving consumers reasonable choices. Whether or not you believe RF exposures from Smartmeters are harmful, it’s only fair that consumers who are concerned about health effects be given complete technical information and the choice of another technology for devices that are installed at their homes.”

The prospects for this bill are not certain – Assembly Member Huffman represents one of localities where resistance to smart meters has been most vocal, and it is unclear how much overall support AB 37 will have in the California legislature.

Moreover, by tying the “opt-out” provision to some undefined “equivalent” alternative, this bill demonstrates the potential conflict between consumer “empowerment” and efforts to achieve energy efficiency. As one commentator has noted, “[t]he bill may offer some sense of control for consumers over how their utility information is gathered, but it could also change the effectiveness of an integrated smart grid if chunks of consumers choose not to participate.”

Of course, and this appears true of most smart meter debates in the United States, consumers generally become part of the serious debate only against the backdrop of ongoing utility smart meter installation. When the history of smart grid development is written, I expect that the record will demonstrate that utilities should have engaged their customers on these issues prior to smart meter roll outs.