Texas hold 'em!
There's been far too much written on smart meters and not enough about the less visible technologies that should wring efficiencies from the grid, defer massive capital investments and deliver a level of grid awareness and responsiveness that's a utility's dream.
Mea culpa.
This situation has evolved, however, for one very good reason. So far, smart meters are the most prominent, consumer-facing technology to be deployed. Not necessarily employed, but definitely deployed. And the issues surrounding those deployments will have a direct effect on the politics of the smart grid and its acceptance.
In a sense - and I don't think this is exaggerating - as go smart meters, so goes the fundamental notion of wise energy use, consumer-utility interactivity and national energy independence.
Yesterday a reader wrote in to ask, "Does the consumer get a vote?" on the nature of their data connection to the utility.
The latest answer to this question comes from Dallas, Texas, and it is not just "yes." It is $%&* yes!" As in, "Yes we get a vote. And we vote NO!"
Last week, The Dallas Morning News reported that as many as a score of people each day in Oncor's service area were refusing to allow installation of smart meters on their property. The Public Utility Commission of Texas (PUCT) had already acted on complaints about the meters - even from people who did not have a smart meter - and ordered third-party testing of the devices. (No doubt Oncor had already done this prior to PUCT approval of the rollout.)
Some complainants - number unknown - banded together to form "Smart UR Citizens" with a blog and a petition. The latter makes seven demands. One calls a halt to deployment until an investigation is completed. Another demand is that Oncor, not the ratepayers, cover the cost of an investigation and upgrading meters for the next 20 years. Another demand is that Oncor's future rate increase requests be rejected or minimized. Another demand is that Oncor notify by phone or email any customer whose usage exceeds 3,000 kilowatt hours per month.
A follow-on article noted that Oncor was performing side-by-side, public testing of smart meters along with their predecessor meters on live television.
And here I quote a few of the comments posted on The Dallas Morning News' site that carried these stories:
"Smart people should refuse to have these [meters] installed. These smart meters will be abused and enable dynamic pricing. Somewhere the citizens need to say enough is enough and take action."
"Notice these are 'smart meters'? That means they are software controllable, so what's the point in 'testing' them? Oncor will already cut people off without due notice, so of course they'll lie, cheat or steal because they feel their interest is above the law."
"Be very wary. My bills have definitely gone up since they were installed. I think these things should have been checked at installation, not 12 months later. Are we living in Russia, or what?"
"The smart meter is a way to charge more to every customer."
"These smart meters will assume you are guilty and you must prove your innocence if there is a dispute. Let's say [Gov.] Perry decides to use them for political reasons and multiply all opponents' usage by 30 percent. How could you prove your innocence? This is no different than red light cameras and electronic toll roads."
"Businesses like Oncor's sole goal is to extract as much cash out of their customers as possible by any means necessary."
"Do you really think that Oncor would install meters that read too high to cheat customers? Oncor has no motive to rip you off because they get a regulated rate of return. Hint: read your meter everyday and track your usage! You'll find that extreme temperatures cause extreme usage. You'll learn the true cost of your habits if you monitor daily and then you'll have the power to modify your behavior and save big bucks!"
"YOU OBVIOUSLY MUST BE EMPLOYED BY THE PROVIDERS."
How to cap this real-life slice of consumer backlash? In this and past columns I've turned to newspaper forum postings to illustrate the general suspicions, delusions and ignorance of the public. I do this not to demean the citizens who write in - though I take comic relief where available - but to illustrate the toxicity of the environment for civic discourse and the hurdles utilities must clear. And the sometimes contradictory claims of complainants. It has been established that, in Texas, many complainants, in fact, do not have smart meters on their homes.
My take?
The recession is deeper and harder than most of us understand, though no one has been spared. Mistrust of institutions is at an all-time high. Critical thinking is in short supply. Anger and finger-pointing are de rigueur.
In this instance in Oncor's service area, public side-by-side testing of old meters and new smart meters is seen by some as a manipulative sham. Transparency is viewed as an illusion.
It is into this environment that the smart grid meets reality and reality is biting back. When I read stuff like the foregoing in The Dallas Morning News, I see an entire nation's goals foundering on mistrust, not to mention the failure of a nascent industry with laudible goals.
Something's gotta give, and fast.
Phil Carson
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com
303-228-4757
Comments
Is the Smart Grid that is Being Pushed a Costly Mistake?
I found the contribution by Robert Spencer a very valuable one. His October 2009 article inspire me not only to read his February 2010, but in addition helped me write the EWPC article Is the Smart Grid that is Being Pushed a Costly Mistake?
The summary says: "The main argument is that, by inaction, each State Government should be responsible to their constituencies for a very costly mistake that is being made by letting the smart grid process continue without giving State Regulators the proper mandate."
José Antonio Vanderhorst-Silverio, Ph.D. - LinkedIn
Thanks for joining us on a Friday
Glad to see this much involvement and the passion here appears to reflect the greater passion over smart meter deployment.
I'll try to respond to specifics posed here and add a few thoughts.
In the column, I tried to illustrate the disconnect between the utility and some of its customers without necessarily banging on either one.
One of those disconnects is that people are demanding unlimited amounts of electricity at cheap rates and neither is possible any longer, in my view. For many reasons, it no longer makes sense financially or politically (and may not be possible to find sites for) to build additional baseload power generation or peak power generation.
Thus, maximizing the efficiency of the current system, including understanding demand characteristics in real time, is a logical pursuit. Some have argued this can be done sufficiently at the substation level and does not need to be at the home level. Personally, having had my utilities shut off once (maybe even twice) during my school days for non-payment (I cooked out in the backyard and used candlelight for about a week), I can understand the efficiencies offered by remote meter reading and, if necessary, shut off. So that doesn't bother me.
Shifting peak load - to avoid expensive peak power generation that you and I would pay for through rates - is also kosher with me, if that's voluntary and can be automated by me inside the home. AMI/smart metering can allow that two-way flow of info for price signals. That doesn't bother me.
But I totally get the mistrust. We can all cite areas in which the government has been heavy-handed or downright intrusive and that bothers me as well. As for the utility intentionally gouging or surreptiously raising rates, I flat don't buy it. Too much oversight.
Smart meters can also send price signals and how those are handled is an emerging piece in this industry. Charging more for peak use is okay with me, because peak use is the most expensive. Until now, those who use a lot of peak electricity are being subsidized by the folks whose use is more evenly distributed throughout the 24-hour cycle. I'm okay with that, too.
I also think that introducing the reality of finite resources to Americans, who are a wasteful lot, generally, is not a bad thing. Good or bad, constraints on resources will be a hallmark of this century, particularly as we move to cleaner technologies. Like it or not.
So, my biggest beef, as many readers here mention, is that utilities are not delivering the information of importance to the consumer's vital interests in the order in which the consumer needs it. And I do support the customers cited in the newspaper forum, because they pay the bills. Good critical thinking produces both paranoia (no one is doing anything to you but you're sure they are) and its corollary (it's not paranoia if someone IS doing something to you). And critical thinking should free Oncor, for instance, from accusations that they're a) a tool of secret government programs, b) surreptiously raising rates, c) gaining new powers and abusing your privacy. In my view...
As Ed wrote, below, "utilities need to vvalue the customer's perspective" and in that I wholly agree. That's the thesis of today's column. On HOW to do that, read Robert Spencer's contribution today. He's got ideas, published ideas.
As for whether the smart meter rollouts merely represent an old paradigm that needs to give way, read "javs" post below, too. Business model innovations are certainly needed and under discussion at a blog site he cites.
As "wgellis" writes, "given the (smart meter) rollout face-plant, the cost of earning trust is now high. Welcome to retailing."
And "gkshaw" offers needed perspective when he writes that Texans are serious about "Don't Mess with Texas," though he adds that the reader/customer comments I quoted don't reflect the general populace, including him.
But, like most of you, "gkshaw" offers suggestions (much appreciated):
Public education. Couple smart meter deployment with time-of-use pricing for immediate opportunites to shift load and save at the customer's end. For those who refuse a smart meter, "utility commissions should allow resistors to be billed a blanket rate with the peak costs added in."
Now, that last comment should get the ball rolling in this forum again!
Thanks to all for joining in today and offering your thoughts. Personally, my thinking on the topic is evolving as I see the pushback and listen to your logic. This morning I had a briefing with a company that is offering home energy management services -- if you get a thermostat that can transmit data to and receive data from the Internet via various wireless means, this company will charge you a monthly fee but save you 20 percent annually on your bills. Yes, it includes cutting peak use for those with time-of-use offers from the utility. But you choose to subscribe and set the parameters and can override demand response events. It's an alternative to smart metering that I think will find a lot of traction among consumers because it's designed to serve them, and them alone.
Cheers, Phil Carson
Those who refuse a smart meter need to be allow to do so
Quote begins.
Public education. Couple smart meter deployment with time-of-use pricing for immediate opportunites to shift load and save at the customer's end. For those who refuse a smart meter, "utility commissions should allow resistors to be billed a blanket rate with the peak costs added in."
Now, that last comment should get the ball rolling in this forum again!
Quote Ends
There is need to shift from the old paradigm that enable saying "... those who refuse a smart meter..." Instead of being so harsh, in the new paradigm, utility commissions should be given a new mandate by state governments to shift from the obsolete business model of letting utilities win rate cases, by opening the power industry to business model innovations where customers are able to choose freely if, and when, they need, for example, a smart meter.
Texas hold 'em
I'm passing along another comment from a reader, with his permission:
r.spencer@comcast.net
The reality is that Smart Grid technologies are quite disruptive and
will materially change the customer experience. Unfortunately,
utilities suck at this sort of change.
Instead of bemoaning the customer reactions, Think Coke and the
reactions they got years ago in making a fundamental change without
warming up the market place.
Utilities would be so much better off if they structure Smart Grid
rollouts to leverage adoption characteristics: first, get innovators
engaged and work out any kinks that might exist; next fan out the
engagement to get early adopters (recruited with the help of
innovators) as the range of potential services and devices are
expanded; follow this by engaging early majority, building off of the
testimonials and knowledge innovators and early majority will
naturally share - hey, may be even super charge this sharing with
special support in setting up blogs, feature articles in the local
papers, etc. At every step assess what the best rate mechanism is to
meet the needs of the segment engaged - like Ford, utilities and their
commissioners may discover that any color as long as it is black is an
antiquated and foolish proposition.
The point is a lot of the criticism is probably coming from late
majority and laggards, maybe even some early majority customers, who
have not been properly prepared. And utilities who ignore managing
the changes those customers face will do so at their peril has is now
clear in California and Texas.
Here's an an article I published in Public Utilities Fortnightly in October on the very same subject but with more details (http://www.fortnightly.com/exclusive.cfm?o_id=240).
Texas Hold-em
Some people from Texas are serious when they display license plates "Don't Mess With Texas". A lot of people that populate these comment opportunities are not a reflection of the general populace, self included.
Fear of government /utility control is real for some. Some people will have higher bills after implementation. If you want electricity from the grid then you have to provide access to implement current time of use pricing. A great public education program will eliminate many misconceptions. There will always be resistance to change. If you don't allow access for modern metering then utility commissions should allow resistors to be billed a blanket rate with the peak costs added in.
TEXAS SMART
Years ago I developed and self-financed turn-key power factor correction projects in Texas. These projects were sold to industrials and even commercial building owners. Power factor guarantees (based on historical demand data) were necessary to close deals. Still, customers also accepted disclaimers stating that actual dollar savings could not be guaranteed given likely rate increases over the life of the installed equipment. This "worked" because the approach was fair, balanced, transparent and verifiable.
Utilities, generally speaking, don't think like retailers. They think like utilities. Their "ecosystem" has been defined by "the rate base" and any idea they could sell to their state PUC. This doesn't make them evil or stupid but it does go to their ham-handed approach to retailing.
The solution to the issue discussed in the article may be owner-side check metering: leave the existing meter and add the smart meter. I can hear the howls already. I understand why utilities would roundly object....but given the roll-out face-plant, the cost of earning trust is now high. Welcome to retailing.
Utilities will have to re-brand going forward. Right now, they're on a par with trash collection....a de facto single-purpose "utility"....practically invisible till they screw-up.
Store fronts might help. Kiosks at big-box home improvement stores might help. Sponsoring Little League teams and Science Fairs might help. Whining, pushing-back and using the power of the PUC and DOE most certainly will not help.
Is Critical Thinking in Short Supply?
One supply of critical thinking is that the smart grid deployment is based on a very strong century old paradigm that has outlived its existance. That paradigm has gone through many incremental extensions, the last of which is that of smart meter deployment based on the same obsolete business model of utilities winning rate cases to the regulator.
There is a need to open the power industry to business model innovations. The critical thinking behind it is in the Electricity Without Price Controls Blog, whose last post read as follows:
Unleashing Design Thinking in the Power Industry by Reframing
Design Thinking demand side radical disruptive innovations to the power industry at the "fuzzy front end" are facilitated with a paradigm shift from the obsolete, dysfunctional, and highly complex Investor Owned Utilities Architecture Framework and its incremental extensions, to the emergent, design-friendly, holistic, and simplified Electricity Without Price Controls Architecture Framework (EWPC-AF).
The EWPC-AF concentrates in what Richard Buchanan calls “fourth-order design (organization - design of systems, environments and culture),” instead of “first-order, second-order or third-order design (communication - design of language and symbols; construction - design of tangible objects; or interaction - action and behavior),” which will be unleashed by complementary Design Thinking to act on the paradigm shift.
To learn about the EWPC-AF, please take a look at the EWPC Blog. Right now, there are more than 200 posts, more than 800 comments, and more than a total of 500,000 views. To get an idea, please take a look at the three most recent posts, which are hyperlinked to other posts:
Another Institutional Memory Warning: Do today's power grids have little centralized control?
A Single System & the Enterprise War
Huge Value Destruction as Disruptive Technologies Impact the Smart Power Service
Please get involved to help breaking the huge inertia of the status quo. I am wide open for suggestions.
Revolt of the masses
Imagine if Dell sent everyone a computer and then invoiced you every month for the next 3 years to pay it off. Oh, and there is a nifty little feature that monitors your computer usage which Dell uses to "permit partner companies to better respond to your wants and needs". You might complain, "I didn't order this!". To which Dell responds that the local government had approved the program. Shut up!
So what's different about a Smart meter? I happen to be involved in our company's Smart meter program and and an advocate for their use. But you have to respect the customers. Just as Dell didn't have to force their products on customers and became sucessful nonetheless, utilities need to value the customer's perspective, create a demand and not simply believe that if the regulator approves it, you're home free.
The reason people object
Maybe the reason is.... what can a 'smart meter' do? If 'telling' me -"hey, you are using more electricity than normal" - if this is the basic extent of a smart meter, why would this be enough for consumers to embrace?
People look at 'smart meters' as a gateway for the Utility/Goverment to eventually say "Hey, you're using more power than normal... and now we are going to A) charge you more per KW to punish you B) turn down your thermostat so you can't use more even if you are uncomfortable or whatever other Centrally Planned determination that can be made...
Can you, as Utilities, Goverment, manufacturers et al GUARANTEE this will not happen?
Can you say with 100% certainty that 'provisioning' (code word for rationing) or "cotrol services" is not the final solution?
With an Administration that is pushing smart grids at the same time using an arcane little known 1906 Antiquities Act to grab over 13 Million acres and call them "Monuments" (confiscating private land) or an Executive Order that restricts FISHING (for God's sake) in the Great Lakes, many Coastal Water Ways (for what purpose?) - there is no reason to believe the purpose is pure as the wind driven snow... Most people are Smart - smart enough to see past the pap and hyperbole of how great this is for us... when you can't even prove how great it is for us...