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.