Electricity 2.0 -- the smart grid

Hermione Crease | Mar 23, 2010

Can you remember a time before the internet? Those long-gone days when information gathering meant a day in a dusty library. When mass communication meant hundreds of faxes and thousands of letters. It's hard to believe we ever managed to run businesses or social lives without it.

And now the energy markets are set for a similar, seismic transformation. The smart grid -- aspects of which are powered by exactly the same technology and protocols that underpin the internet -- will change the way we see energy provision for ever.

But what exactly do we mean by this much-discussed, but poorly defined concept? The smart grid has become something of a clothes horse in the last few years, with plenty of things being thrown at it, but no clearly styled model emerging from the confusion.

Like the internet, the smart grid is often misunderstood. Just as the world wide web is not the internet, but rather an application that runs on it, nor are new domestic energy displays synonymous with the smart grid. They are simply gadgets that are facilitated by it.

Put very simply, the smart grid is a network that uses IT to deliver electricity efficiently. It has a number of characteristics that differentiate it from the existing grid. Firstly, it enables greater consumer participation. No longer passive recipients of power, customers will have more opportunities to interact with suppliers and other participants on the grid and, thanks to two-way information about energy use and pricing incentives, the motivation to change behaviours.

The smart grid will support multiple generation options, and will incorporate greater levels of energy storage -- for example electric cars -- to help balance the disparities between supply and demand.

It will also be far more resilient than our current model. Intelligent sensors throughout the grid will give us a much clearer picture of what is happening at the critical levels below sub-stations and will enable the grid to work round outages. So if one portion of the grid goes down, the sensors will spot the incident and divert electricity from an alternative source to fill the gap. In other words, it will be self-healing. Again, this is similar to internet protocol, which identifies the quickest path through a multitude of congested network connections to deliver information as rapidly as possible.

All these qualities will aid operational efficiency for the electricity system as a whole -- as well as for the individual suppliers who benefit from greater asset optimisation throughout their portfolios.

Crucially, it will also support large-scale low-carbon generation by addressing the issues that arise from greater penetration of intermittent renewable energy sources, particularly their variable and unpredictable outputs.

Not surprisingly, this intelligent, interconnected network is by no means a straightforward proposition. It has a lengthy ingredients list, and so requires extensive deployments of hardware and software to make it work. These are best seen as three distinct systems, although there are interdependencies between all three: household, distribution and software.

The most obvious component at the household layer is the smart meter. Smart meters, which store detailed data on energy usage and transmit and receive information, are critical to the wider smart grid, since they are the channel through which suppliers and consumers communicate. This two-way exchange of information will enable consumers to be far more proactive participants in the energy system. We can also expect to see some form of demand response technology, where the energy consumption of power-hungry appliances in participating households is automatically reduced or adjusted based on real time energy information communicated through the smart meter. In the majority of cases, it's unlikely the households that signed up to a tariff that included demand response would even notice that anything had happened; it could be as unobtrusive as a 30 minute pause in a washing machine cycle. This could happen when the available generation or transmission capacity looks likely to be exceeded, eliminating the need to have standby generation running on the off chance of a spike in demand.

To make this happen, the transmission network, the national-scale system through which electricity is transferred at very high voltages, will need to be expanded in response to the integration of low-carbon sources. It's all very well building highly efficient wind turbines in blustery Scotland, but electricity needs to be transported to population centres in other parts of the country.

When it comes to distribution, the regional transfer of electricity at lower voltages than the transmission network, things get more complicated. This is where advanced utility control systems need to be deployed in substations and other assets like wires. Such a network provides the sensors and controls that will improve the system's resilience and allow it to integrate distributed low-carbon generation from households and businesses.

There is also a brand new element to the distribution layer that needs to be built: the communications network. Operating in parallel with the electricity grid, this network distributes data between all elements of the new intelligent grid. It is possible that every smart meter could have its own IP address, and that IP will become the de facto communication protocol. But whatever the final design, the communications infrastructure will need to be protected from viruses, malware, denial-of-service attacks -- in fact, from all the threats faced by any other communications network.

The final element is software. Enterprise-level software is required to present, interpret, analyse and react to the huge amount of data flowing through the system. Utilities' back offices will need to be integrated with billing and asset management systems to ensure that customers see the benefits of their response to changing price signals, and the network is operating at a level to support and respond to fluctuating requirements.

Nonetheless, the biggest challenge is that all these elements need to work together. Building a smart grid requires choices to be made, and there are a multitude of interdependencies that must be identified, understood and negotiated.

There are plenty of opportunities for standards to be drawn up and implemented to ensure interoperability, since no single provider will deliver all elements. Again, this is fraught with potential danger, since there are also plenty of opportunities for the law of unintended consequences to come into play. Standardise at the wrong layer, or for the wrong piece of individual equipment, and the smart grid may lose some of its fluidity and flexibility, hindering potential growth in the future. Only one thing is certain: the functionality we put in place now is only the start of a whole swathe of potential applications in the future.

There is also the natural question of how the costs of all this will be met. Consumers still appear to be opposed to the introduction to smart metering -- never mind the smart grid -- almost certainly because of fears that the costs involved will result in severe hikes to energy bills.

For the typical household consumer, this technology remains something of an enigma. However, the data provided by smart meters will be streets ahead of what consumers currently receive from their energy suppliers. Many advocates of smart metering compare the current system of energy billing to buying food in a supermarket, taking it home and eating it. Three months later you receive an unitemised bill with no information on what you bought, the money you saved or how your shopping list compares to other rival supermarkets. Smart meters will give consumers a far clearer picture of their energy usage and will give them the information they need to change the way they consume this energy.

Utilities will certainly see efficiencies and cost savings derived from reducing periods of unprofitable down time, fault elimination, un-manned intervention and asset utilisation -- all of which might be regarded as easy wins with the potential for swift realisation.

But these early pickings are probably not enough to justify the expense. Italy has already spent E2 billion, but that was simply on installing smart metering rather than the whole grid. The $4 billion that the US has set aside for smart grid initiatives is close to the sum required to buy a smart meter for every house, and leaves little for strengthening transmission and promoting standardisation.

Generally speaking, estimated costs have not taken into account the utilities' desired return on investment. And utilities will need to investigate ways of building new relationships with consumers, and find ways of using the enhanced, enterprise-level information that they are able to generate to create real value for consumers.

The utilities will clearly need to look at new business models in response to the huge changes in the industry prompted by the advent of a smart grid. The UK has set up a government-sponsored committee to investigate smart grid options, including the standards and communications involved. Fortunately, before it comes to its final conclusions and commits itself to a particular model, there are opportunities to look abroad for examples of success and failure.

The US is probably the closest to having a finalised version of a smart grid, and Texas -- the biggest wind power generator of all US states -- in particular has benefited from incorporating demand response technology to ensure that its substantial wind resources are efficiently used. The Texas Panhandle, well known for its typically windy conditions, is home to some 2,000 wind turbines. One night in February 2008, grid operators panicked when the wind tailed off and the turbines ground to a halt. The resultant drop in power threatened to cause an electricity blackout across the state. However, demand response kicked in to save the day, adjusting electricity consumption in response to this supply emergency by temporarily dimming lights and shutting down refrigerators.

Despite the challenges ahead, the smart grid will transform the way energy is produced, bought, sold and consumed. Once in place, we will look back and try and recall what the energy industry was like before. And, just like modern technology in almost every other sphere, we will scratch our heads in wonder at how we ever coped without it.

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Well Hermione I sincerely hope none of what you describe comes to pass. There is one critical difference between the internet and the electrical grid. Without the internet life becomes a tad more inconvenient. Without electricity life pretty much stops.

While many companies stand to make millions (billions) from this so-called improvement it seems to me that no-one has asked the customer what they want. I suspect they want lower electricity prices not more gadgets. Lower prices come from an increase in reliable supply. Both windmills and solar are expensive options already and adding lots of complex software and hardware to integrate them into the current grid just makes them even more expensive.

There is only one result of this "innovation" and that is higher electricity prices....the very last thing that customers want.

Perhaps the utilities that are so keen on doing this should poll their customers first. God forbid someone should actually care enough to do that.


My computer scientist daughter calls me the dumbest person to ever sit in front of a computer screen, so I wonder how I am going to function with the smart grid. Actually I suspect that I am not going to function at all. This is one of the reasons why it has been so easy for me to teach at various places in the world, where the complications of the real world are left up to strangers. It also explains why I was so happy in the army.

Malcolm uses the expression "so called improvement", and as usual he hits the nail on the head by implying that the smart grid could mean more expense for persons like my good self. But not just for me. The TV audience is being lied to and tricked into buying something that they might be better off without. Nobody is more positive to renewable and alternatives than I am, but to get maximum benefit from those items a source of highly efficient and reliable power is necessary, and that happens to be nuclear.

My problem is that I am only interested in the situation in the country where I live and pay taxes (Sweden), and in this country simple things are made difficult by the hypocrites, fools and crooks who have confected expressions like 'the smart grid' in order to take advantage of the naiveté of voters.

Sorry guys, I must respectfully disagree with your positions. Done properly, the customer-facing parts of what's called the smart grid will significantly lower customers energy bills while improving service reliability and providing market access to a lot of new and inovative solutions to presently intractable problems.

Len reveals the whole problem with smart grid implementations - "done properly" is woefully absent from most smart grid plans in North America because the majority of consumers will not have the proper customer-facing parts. The end result will inevitably be much higher electricity bills, whereas done properly our bills wouldn’t increase by as much. Moreover without regulatory reforms, the added costs of smart grid and renewable source generation will be passed on to every customer since there is no other way to pay for it.

I'm saddened to say also that many politicians, including the ones here in Ontario, know this and are resigned to letting our electricity bills rise substantially into the future. Watch for them to be telling the population this is a necessary and good thing for consumers in the end. Go figure.

"We can also expect to see some form of demand response technology, where the energy consumption of power-hungry appliances in participating households is automatically reduced or adjusted based on real time energy information communicated through the smart meter. In the majority of cases, it's unlikely the households that signed up to a tariff that included demand response would even notice that anything had happened; it could be as unobtrusive as a 30 minute pause in a washing machine cycle."

Some consumers may sign up for this. Most will not.

"Smart meters, which store detailed data on energy usage... "

This notion has already become enormously controversial. It's entirely unnecessary for a meter or a utility to store detailed data on energy usage. All the meter needs to do is record consumption on an hourly basis.

I agree with Len that done right, many of the ideas are beneficial. Consumers need to see a compelling value proposition and application has to be highly selective. Instead, vendors are tripping over one another to sell functionality that has been poorly thought out and may not be necessary. Why not, when regulators can essentially tax consumers to pay for it.

Ice Energy has one of the most compelling ideas I've seen for addressing the consumption spikes caused by residential air conditioning. It's an ice machine that sits beside the air conditioning condenser that uses the A/C's compressor to make ice at night and melt it during the day. The only way they will sell these systems to residences is through utilities. If I live in Bakersfield and I want one, I can't get it. Just nuts.

"It's entirely unnecessary for a meter or a utility to store detailed data on energy usage."

Jack, utility people will disagree with you on this for two reasons;

Firstly, a smart meter is intentionally designed to store a few weeks worth of hourly consumption data in its internal electronic memory in case its AMI network system goes down for some reason. This gives ample time for the network failure to be repaired and be brought back on line again, at which time the customer's historical Time-Of-Use consumption data can be off-loaded from the meter.

Secondly, many have recognized that at least some feedback to customers of their TOU energy consumption patterns will be useful to them, even if it is only historical. Since for many utilities there are no plans to provide most customers with any direct communications access with the meters (yet), many utility companies have hired third parties to implement web presentment tools for their customers instead. This will permit customers to log in to their secure web-page utility accounts and view detailed historical daily and hourly consumption patterns. This requires a certain amount of historical detailed TOU meter logs to be stored in the utility's computer systems.

Furthermore, many smart metering systems are being implemented with Meter Data Management systems to process TOU data for billing purposes. In essence MDM systems will collect daily TOU meter logs from all customers and store them for several weeks, such that at the end of each billing period all customers’ bills can be calculated and sent out.

This approach allows more flexibility for rate changes. If all the meters do is log TOU energy consumption, regulators will easily be able to change the clock hours for TOU billing periods, and change the TOU rates, by simply changing the software in the MDM system. The software in the meters therefore never have to be changed this way.

For the record, I am NOT against the smart grid, whatever that means. I am against investments that will not, EVENTUALLY, lower the cost of my electricity. Professor David Newbery of Cambridge University seemed to think that we should embrace the deregulation of electricity because it gave us choices, but I am not interested in choices that cost me a day in Paris. Of course Mr Newbery did not understand this kind of reasoning because he is being paid to sell foolishness to academic fools.

As Bob points out, utilities are often entirely illogical. They'll argue agressively that "smart grid" is impossible because the central office systems required to store, record and present the data are too costly to implement, and then turn around and hand the entire functionallity over to Google who will provide the complete service to customers for free simply for the priveledge of selling a few adverts to the customers. Go figure.

Smart meters and smart billing could hardly make a dime's worth of difference for me. Our house is all electric and of course the heatpump/AC is by far our biggest load. For the last maybe 15 years our co-op has been able to shut down our AC and water heater for brief periods to avoid peaking. I can't say that I have ever noticed. and I get rewarded with a small discount.

If we had a time-of-use differential about the only thing I might do differently is to more often run the last load of the clothes dryer at low rate hours. We wash clothes with cold water.

I frequently see where the electronic/computer/programmer Pulsers among us talk about improved two way communication between the power company and the consumer. I don't know what this is about. Who has communication with their power company? What in the world would we talk about?

When I was starting up oil refineries in a past era we would have the power company on an open telephone line while starting up a multi-thousand HP induction motor (as might drive a catalytic cracker air blower) but this only happened about once a year. If these big motors did not pick up the load in less than so many seconds we had to stop and wait for motor to cool before trying again, But I digress.

Here in the Ozarks we can have very bad ice storms. These can take down many poles, many lines. All the electronics in the world can neither prevent nor fix this kind of outage, the kind we get.

If I can be so bold as to summarize your paper:

Step 1: Provide a wad of money to subsidize a new technology
Step 2: Install Smart Meters everywhere and connect them to a communication grid
Step 3: Convert consumers to some form of Real Time Price based billing system
Step 4: A miracle occurs
Step 5: The grid becomes stable
Step 6: Greenhouse gases are reduced
Step 7: Everyone save 10% of their energy bill

I think all of us could use a little more detail about step 4 before we can support the plan.


Your Step 7 is possible all by itself if residential consumers were all equipped with simply a real-time in-home energy display that tracks instantaneous power demand in watts, cumulative energy consumption in kwhrs, and cumulative energy bill.

Hydro One, the largest distribution-only utility company in Ontario, has conducted study after study over the last decade by equipping hundreds of customers with a display. Over time the results of the studies have consistently proven that the study groups of customers continuously curtailed their energy consumption habits ranging from 0% to as much as 20%. On average their total reduced consumption was nearly 10%.

Can you imagine the impact on the whole grid if there was a 10% total reduced consumption by all customers.

The reasons for this total reduced consumption are largely due to simple awareness of one's energy bill in real time because the display puts it in your face every day, instead of waiting to see it at the end of each billing period. The other less obvious reasons are the display's educational benefits where customers use it to teach themselves how much power demand and energy costs are associated with their lifestyle habits and for each of the various electrical loads in a home.

Too bad most utility companies cannot afford, or are not interested in, providing all their residential customers such tools.

Bob wrote: "...customers with a display. Over time the results of the studies have consistently proven that the study groups of customers continuously curtailed their energy consumption habits ranging from 0% to as much as 20%. On average their total reduced consumption was nearly 10%.

A couple of days ago I posted 1% to 3%. If I were wrong by a factor of 3 to 10 times, and more, I would have hoped, as a matter of courtesy, that some Pulser who knows better would have rescued me from my delusion. As to those who it is claimed reduced their usage by 20% I'd suggest they get someone to give them some assisted living help - unless they really don't give a damn.

Watching a smart meter wouldn't do me much good (and my wife none) except for the novelty - like keeping track of my gasoline mpg's or watching the computer readouts in our van. (I've never known another living soul to do this.) Off topic question: How is the gasoline flow measured - it checks out incredibly accurately,)

So much of the variability of my kWh usage is unrelated to choices I can make that I think trying to assess savings that can be attributed to smart meters is a daunting task. Every once in a while we get a stretch of subzero F temperatures- yet sometimes none for several years. But when we do it's not something like 10% more energy - it might be over 100% more for the period. And a single teen age guest might use 5 times as much hot water than I do. Prudent choices get swamped by the noise.

I revisted the article that gave me my 1% to 3% reduction in electric usage by those who had used a smart meter for over a period of months and found my memory was good. This research had been done by the Arlington ,Va based Cooperative Research Network (CRN) and cited in part in the April issue of Rural Arkansas.magazine.

- No where nearly as assertive as Bob's "the results of the studies have consistently proven that the study groups of customers continuously curtailed their energy consumption habits ranging from 0% to as much as 20%. On average their total reduced consumption was nearly 10%."

Whether smart meters are a smart choice could pivot on whether Bob's effusive reporting of 10% averaage reduction due to smart meters is valid or the 1 to 3 % that I saw. If having a continuous meter (vs a clear monthy statement) would make the average consumer to somehow decrease his electicity consunpltion by 10% would mean the consumers are even dumber than we all have assumed - dumber than competent? I hope not.

Don, if you have trouble believing my posts above, call up Hydro One's Conservation and Demand Manager yourself and ask him for the results of their years of in-home display studies. Some of the studies were started long before smart meters came out when they put sensors on some of their old electromechanical meters under flate-rate billing too.

Don: Perhaps not in your utility district, but in many, the present system is based on regulatory rate setting for a monopoly generation / transmission / distribution company, with a very large part of the cost-based rate set to cover the costs of generation. In that environment, it is obvious that a) the utility makes its greatest profits by getting its costs as high as the regulator will possibly allow. (goldplating, accepting irrational union contracts, etx. etc.). b) No reasonable means of implementing competitive generation has yet been tried, all seriously flawed for many reasons, one of the worst being barring of micro and distributed generation from the market, among others.

The only way to fix these is with a really smart grid which completely takes over the management of an automated market. It will cost each customer perhaps as much as $5.00 per month, and the benefits will not be instantaneous, but they will come.

Bob , There are many ways a consumer can experience lower kWh usage. A new heat pump with a better COP,-- natural gas becomes available, so he shifts from electric hot water to gas, he spends time in Florida, his kids move out. None of these necessarily mean less energy usage. They might actually increase net energy usage. (Many very good cars have been replaced too soon by ones getting better mileage I have never satisfied myself by estimating how much oil goes into a car before its first mile but I have seen estimates of 40 to 80 barrels. It's easy to show cases where driving a lower mileage cars years more saves gasoline. And the eventual replacement could well be more fuel efficient than a replacement today.

I have no proof that my numbers ( 1 to 3%) reduction in electricity use by watching a continuous meter readout is better than your 10%. Those rare weird people (a'hem) who make a game outa getting good mpg's can easily beat the EPA ratings. I'd guess the electricity savers (beyond prudence) are as rare.

Len, Where do these sneaky high profits you write about go? Not to the owners, the share holders. Not to management, Their take, while nothing to cry about, is relatively modest compared to many other industries.As a fairly successful investor I have regretted buying all six electric utilize I have bought over many decades. It's a weakness I guess.

My all-electric house-hold uses about 17,000 kWh/year. Let's call it a continuous 2 kW. For me to cut my usage by 10% means cutting 400 watts 12 hours a day for all 365 days a year. I don't see how we could realistically come close to doing this.

Suppose we instead heated the house, our water and oven with gas and our average usage was 500 watts . That means to cut my usage by 10% I'd have to cut 200 watts for 6 hours ever day by,say, only brightly lighting and running one TV or computer in the house. Possible, but the decrease in usage is very small.though the percentage is high.

I think these crude hypotheticals suggest that smart meters have little to offer. I'll stick to my 1 to 3% reduction figure vs the touted 10%.

Jack Mark, I don't think so but perhaps I'll get zapped tomorrow. Stay tuned and have your say.


Hydro One's studies revealed a wide range of total reduced consumptions amongst hundreds of residential customers at a time. That range was from zero percent to a high of 20 percent, and judging from your comments above, you would rank near the zero percent type of consumer.

Basically without a real-time display consumers are buying electricity blind every time they throw a switch in their homes. You would be surprised Don to learn the substantial percentage of the general population who don't know the difference in energy costs between running a light bulb versus a running hair dryer for example. A display quickly teaches them this difference, and once they learn, you would also be surprised just how much some consumers are willing to modify their lifestyles and energy use behaviors just to save a few percent off their energy bills.

Don, consider how some consumers go out of their way to shop around to save a few cents off groceries, or a few cents off a gallon (or litre in Canada) of gasoline. And just think how consumers would react against the gas stations if they all suddenly removed their "real-time" displays from their gas pumps and simply sent consumers a non-itemized fuel bill in the mail every month instead. The latter is precisely what has always been the case with electricity in case you didn’t make the connection here.

Regulators currently are completely ignoring an alternative architecture for smart metering that leaves choice in the hands of consumers: a publish-subscribe architecture similar to RSS feeds. The utility would broadcast instantaneous pricing information, receive or collect only daily or weekly usage information.

We need smart meters with a downstream interface to the consumer - sure, a display, but also an interface standard that appliances can be designed to. Most current microprocessor-controlled appliance will be very unhappy to have their circuit de-energized. And I doubt many consumers will appreciate having their plasma big screen turned off during the Super Bowl!


The Zigbee Alliance has been pretty successful in getting Zigbee wireless radio networking adopted as one of the accepted standards for appliance (demand response) communications. There are other wireless interface technologies accepted too unfortunately as there isn't one single communications technology being used; doing so would obsolete many smart metering systems already deployed in the field.

None of the software protocols these communications interfaces use are particularly standardized either because they tend to be very specific to meter manufacturers when appliances communicate with their meters. This is because all smart meters and their AMI networks have been proprietary designs, especially when it comes to demand response capabilities.

The thinking, I believe, is that consumer appliance manufacturers can and will eventually offer multiple interface options to consumers because consumers are expected to be replacing their appliances more often than utility companies will be replacing their meters. When shopping for new appliances, consumers are expected to simply choose those appliances with the interface option compatible with their utility company’s meter. But this may be flawed thinking because appliance manufacturers tend to be very cost sensitive, and providing flexible or multiple consumer options for demand response communications will be more costly and unpalatable to them than if there was one single standard.

The problem could / should have been dealt with very long ago had all smart meters and their demand response technologies been standardized. Unfortunately this was not even on government radar screens many years ago.

Bob, Alas, there is hardly a sentence in your last responding comments that I can endorse - except maybe that bit about how many dumb people you find.

There seems to have been precious little overlap of either our experiences or our observations. There are people who are not recognized as being poor because they are frugal. Many people with the same limited income are poor because they are not frugal. They are poor because they lack disciple and succeed at resisting leaning. They will do such things as go to the store many times a week to buy a load of bread or a quart, a quart, of milk!. Now God didn't make anyone so dumb as to not know this is dumb. Frugality is not looking for a gasoline station with low prices, frugality is buying gasoline when you pass a cheap station or at one you know has clean toilets, as frugality does not mean cheapest but best value.

My electric bills are very well designed. Along with the bill is a news letter largely dedicated to educating the customer on how to reduce his usage. It also plots the Hi and Low temp for each day of the period along with the degree-days and historic averages.

A non-itemized electric bill is irresponsible (I don't think I have ever seen one) and no argument for a smart meter.

By and large people are not dumb because they lack intelligence - they are dumb because that's the way they want to be, i.e. they find learning a pain. Talk about pain - just try to help someone who doesn't want to be taught! That's at the root of the dismal ignorance of our students today.

Yet it would be a far better world if the Pollyannas were right once in a while.

Don, your ignorance and misunderstanding of posted comments is endless.

What I meant by “non-itemized” bill is that no one's electricity bill spells out the separate costs to run each and every load in your house. If yours tells you how much exactly your lights cost, and how much you spent on running your furnace, how much you spent running your refrigerator, and so on....., please tell us what metering system your utility uses because it's unheard of in North America.

Yes the world is full of dumb and uneducated people, but even highly educated consumers aren't necessarily educated about the meaning of the difference between electrical power demand i.e. watts and energy used i.e. watt-hours.

Perhaps you can educate the readers here Don since you seem to know better on just about every subject article posted on this website (why do I waste my time with this).

A few things are obvious despite there being a small minority such as Don who refuse to learn them. a) If it should be necessary for multiple communications systems between appliances and controllers, it would be far wiser to put the multiple interfaces in the few controllers (meters or other) than in the many controlled items (appliances). b) An immediate international standard on both the communications medium and on the content and meaning of the messages would save society a lot of money and grief, especially given that appliance manufacturing is mostly offshored. c) Mating ones appliances to a given regional meter / communication standard will be of little use when the homeowner moves to a region with a different metering standard. d) In order to be an intelligent participant in the electricity market, I need at least as much information on my electrical consumption as I get on my gasoline consumption, AND a VARIETY of suppliers who are operating in a truely competitive market.

Ugh, this thread is getting a bit testy. Truthfully, I don't see much inherent conflict in Don's or Bob's beliefs. Don, if you would like to exercise your frugality, then a real-time pricing of electricity would be a way of doing that. Let's assume off-peak electricity prices is 60% of on-peak pricing (not a horrific assumption). Then any household item that you can postpone use to off-peak could save you 40% on your electricity use (for that item). That might add up. Definitely more than 10% overall.

Refrigerators designed to cool in the morning and then "coast" until 6 pm or so could avoid peak electricity pricing altogether (and this could be done totally automatically with minor changes to product design or even as a retrofit).

I'd share Don's concern about smart meters (and still do somewhat) was it not for the historic fact that electricity has ALWAYS cost more (sometimes much more) during peak times than off-peak times. For whatever reason, this price swing has been kept hidden from the residential consumer. If smart meters can simply avoid additional plant builds, then they are probably worthwhile.


As a minimum, smart meters serve as two primary functions for all utility companies - they automate meter reading thereby saving utility companies money (eliminating field people), and enable Time-Of-Use billing. Everything else they might do or enable, like smart grid functions for asset and outage management, distribution automation, etc., or assisting consumers with educational feedback, demand responses, etc. are all secondary because they require utilities and customers to invest in peripheral grid systems and in-home devices besides the smart meters themselves.

So smart meters alone are not really a very big deal, especially if the TOU peak-to-off-peak rate ratio is kept quite low, but high rate ratios together with other systems and devices they can potentially be a very big deal. The issue of course is how many utility companies and consumers are actually going to spend the money on all the other peripheral systems and devices to enable all these other capabilities.

Bob hit one of the two big problems I see with smart meters right on the head. We are installing the meters BEFORE establishing communication standards. Many of those meters will need to be replaced or reworked when we figure out what to do with them. Totally basackwards.

The other big problem I see is the concentration on residential. It is the third of the market with the least opportunity to respond to price signals and the least sophistication in using the opportunities it has. And it is so fragmented that whatever results can be achieved come at the highest possible price.

An increasingly smart distribution system, and smart interfaces (meters or whatever) with industrial, large to medium commercial and ag customers begins to make sense. In a decade, or more, a logical program would begin to penetrate residential. The one exception to this is some interface for residential air conditioning. But is it more economic to put that in the AC controls that are already electronic, or in a stand alone meter at this point?

Clearly the dumbest people around are those pushing out residential "smart" meters without a clue about what they may or may not ever do.

Jim, I am all for Time-Of -Use- differential charges. but in my case, and many like me, have almost no degrees of freedom.

My heat pump spins my meter the fastest, but except for using the lake for a heat source there isn't much I can do to reduce my electricity usage. and it turns out by the vary nature of the beast that it uses the most energy during the wee hours. During the winter we typically have overnight temperatures in the 20's. This means the heat pump runs continuously. At about 20 Fanned and below the house temperature sags and when 2 degrees below set-point I^2R heating chimes in; It's a double edged sword, as the heating load goes up due to falling temperatures the COP of the heat pump drops significantly.

During the daylight hours temperatures usually go over 40 F and the heat pump operates very efficiently during what are normally?called high demand hours. (Because many use heat pumps here, could there be little difference in demand between night and day during the winter?)

With Bob's itemized bills we could see some observations/questions from sharp-eyed consumers: "Since we replaced our incandescent lamps with fluorescence our heating bills have gone up and our air-conditioning bills have gone down? Since we got a new super efficient refrigerator, while it does use less electricity it's made my kitchen cold."

As to the kind of meter I have, the Co-op reads it remotely and can cut off the heat pump/AC and water heater remotely to avoid peaking. We have had this meter so long that I kinda assumed it was in general use and I didn't want to mention it again..

I know Smart Grid is the current new technology being pushed thru the various individual state PUC's ot State Corporations who have control over Utility projects, rates, etc. I am not sure that the Utilities ability to collect add'l information on time of day consumption of power by the variety of consumers will improve the cost of our respective power bill or for that matter better distribution of electric power to the consumer. Given the utiopian concept that a Utility is restricted to a specific amount of profit it may collect (above it's cost profile) it's overall cost base is still distributed over the number of megawatts it produces and transports to consumers to then be paid for. Their overhead becomes adjusted based on changing conditions, current needs and changes in generation/transmission needs. If time of day billing is designed to increase the Utilities receipts it probable will succeed. Will the average consumer be able to change their consumption habbits, probably not. Does that mean the average consumer bill will increase, probably yes, someone must pay for those smart meters. What benifit has the Utility gained with smart meters over what information is currently available to the Utility ? The Utility currently knows how much power it sends out to it's consumers on an hourly basis, it also knows how much power is consumed/purchased by the user per month (since that is the nromal billing cycle), do they really need to know exactly how much John Doe consumes hourly in his residence and since it is such a small percentage of the total generated, why is this information so useful ? Utilities already have the capacity to turn down the voltage during overload conditions thus allow more consumers to be served with the same power volume generated in peak conditions. I can not see any real benifit served with time of day meters attached to residential homes consumption unless it is strictly for electronic meter reading.
As for smart substations, or computer controlled distribution and transmission lines, there is where smart grid technology is really going to benifit Utilities and Transmission companies with more control over the flow of electric between points on the transmission highway from generator to consumer. The last black out in the northease was not caused by a malfuncting meter in a residential consumer it was caused by a malfunction in a substation. Lets fix the problems with the aging transmission system including old switching devices and substations that do not communicate with control rooms.