Smart Meter Marketing

Kenneth Smith | Apr 05, 2011

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Introduction

Let's face it. Most consumers really don't care about electricity per se, except those of us who work in the industry. Just like most consumers really don't care about hand tools, except serious do-it-yourselfers and people who work in the industry. What people do care about is that the TV turns on so they can be entertained. That the light bulb works so they can read a book. Or that the microwave oven does its thing so they can feed their family.

Much of the smart meter discussion and marketing efforts to date has been classic early stage technology messaging -- discussions of features, functionality, perhaps something about long-term cost savings mostly driven by the engineers who built the product and distributed by industry insiders who care a lot about electricity. But from Maine to California, consumers aren't buying it. To the contrary, many are demanding that regulators force utilities to offer an opt-in/out option or stop the programs all together. When the benefits seem so obvious, why?

Because consumers are asking themselves a question that is more fundamental to the things they do care about, and one that the industry has not yet answered compellingly. The question consumers are asking is 'Why should I? Other than a long-term financial benefit that might translate into a few bucks off of my monthly electricity bill (oh sure rates are going up so I might save more in 5 years but you guys always say that and I can't control rate hikes anyway), what does a smart meter do for me that my current electricity service doesn't already do? Will my TV not work, lights not turn on, or microwave not cook my food if I don't put one of these things on my house? So there is marginal upside, possible financial downside, and none of my neighbors have one -- let the next guy be the guinea pig.'

A similar situation was faced by door to door TV salesmen, cable installers, and PC manufacturers. Virtually every technological innovation introduced to the mass market has gone through phases of adoption so similar that the well documented parallels have become marketing paradigms.

Starting With The Joneses

Televisions were first introduced to the market in the late 1940's. Some readers may remember their grandparents telling them of inviting neighbors over to watch the baseball game on their new high tech gadget. In time, prices came down due to maturing supply and demand economics, and more entertainment content became available, broadening the appeal and widening the perceived value of the unit, more and more people wanted to keep up with the Joneses. But they didn't want to buy a TV, they wanted to watch the ball game, Jackie Gleeson, or I Love Lucy. The same process occurred with Cable service. Field sales reps went door to door selling many channels of entertainment and when they got enough people in a town to agree to pay the monthly fee the economics worked, the infrastructure was installed, and kids started pestering their parents about the Joneses next door who have cable and can watch special movies not available on regular TV -- so the market for cable TV expanded cost effectively, through customer-driven 'pull' rather than company-driven 'push'.

The same happened with the PC, the internet, transistor radios, and Smart Phones. A small segment of early adopters, people with disposable income (ability) and the desire to stay ahead of the curve (willingness), bought early high-priced versions of various products new to the market. They became the market 'reference accounts' that helped convince many more people with perhaps a little less money, perhaps a little less willingness to buy a first generation product to feel more comfortable that the product indeed worked as advertised, that it delivered the promised value, and that it now had matured to include all of the desired features. On every street, in every apartment building, in every office in America there are a few Joneses, and many more who are just as happy letting the Joneses go first. A key necessary element that must be in place before the appeal of a product can 'cross the chasm' to willing (not forced) mass market adoption is establishing those early adopter 'reference accounts'.

Smart meters are now at the early adopter phase. Top down, forced approaches have clearly not worked. Even though energy is a commodity and the utility industry quite mature, these new devices require a consumer marketing approach. Smart meter marketing efforts need to focus on finding and communicating to Mr. & Mrs. Jones a compelling reason to buy, because these products are not unaffected by adoption cycles. Without first securing the buy-in of the Joneses any further investment in mass market promotions or efforts to force adoption will result in continued regulatory resistance and mounting legal bills, but that will not result in the millions of happy customers pleased with their new smart meter that utilities need to pave the way for cost-effective mass market adoption.

Hiring A Product To Do A Job

'People don't want to buy a quarter-inch drill. They want a quarter-inch hole.'1 Likewise, people don't want to buy electricity, they want the TV to turn on so they can be entertained. The light to turn on so they can read. The microwave oven to cook dinner. Aligning smart meters with various electronic products consumers hire to perform every-day tasks moves the discussion away from the meter itself and onto the product that does the job consumers want done.

Utilities can hark back to the days when they were an integral part of the home electric equipment supply chain for such items as clothes washers/dryers and toasters. Were these items marketed as a way to expand the use of electricity? Of course not, they were sold as conveniences for the modern home or time savers for busy people. No one bought a new GE clothes washer so they could increase their electric bill. The electric utility provided the necessary power at a reasonable rate to enable them to automate clothes washing at home saving time and money. They installed electric baseboard heaters because it was (at the time) cheaper that oil for keeping their family warm. Electricity was an essential element to facilitating the completion of the job, but it was silent, hidden, taken for granted (until it didn't work, of course).

Even early adopters won't buy a smart meter just so they can change their rate plan from fixed to tiered pricing. But they will hire a smart meter and time of use pricing so they can buy that cool new electric car to get to and from work every day in style, and also save money compared to refilling their tired old car with gasoline every week. They will hire a smart meter if they can buy the latest smart appliance that helps them automate grocery shopping and clothes washing, and save money by running these tasks at night. And they will hire a smart meter to help them better integrate a solar panel on their roof or a battery in their basement so they can be green and go mostly off-grid, but still have access to sufficient, reliable power just in case.

The meter itself is much like the Internet modem or cable box, it's a black box about which consumers understand little but it is essential to facilitating the job people hire other products to do.

Pricing Models Must Be Simple

Some readers may be old enough to remember our parents making us wait until 5:01pm before we called our grandmother to wish her happy birthday because the nighttime rates were far lower. Anyone who lived through the 1970's remembers when turning off the lights upon exiting a room became a reflex and not a considered action. Consumers absolutely have it in them to change behavior or act in a new or different way when presented with a simple, clear and material financial benefit; one that doesn't take regular checking of an online calculator to understand, especially when the dollar value is around $10 per month because it's just not worth the time. Phone companies learned this early on, and some smart meter programs are following a similar model.

Just as the power industry was built to meet peak demand, telecommunications companies built capacity for the busy business hours when they could charge a premium, but knew they had extra capacity at night they wanted to fill to improve their economics and accelerate return on capital investment. So they offered lowered pricing to encourage people to use their phones at home at night. They balanced their 'load' with a simple tiered pricing model. Increased night-time use meant increased revenue for the telephone companies, but the value driver used to market the program was the chance for mom to talk with her sister in Florida once a week or organize a play date for their kids -- 'jobs' the telephone facilitated at a cost consumers were willing to pay. And the rate structures, approved by regulators, were simple, before 5pm and after 5pm, local vs. long distance -- anyone could make that rough calculation.

Mass market adoption demands simple pricing models. Time of use pricing should have easy to understand pricing: Day time pricing and night time pricing based on demand models and economic analysis to determine the most effective balance between maintaining sufficient reliable supply while earning a fair profit for the utility. But to the consumer, it's one price at 5:00pm and another at 5:01pm -- that simple, virtually transparent.

Smart Meter Marketing: An Integrated, Cross-Industry Marketing Program

Early adopters of electric powered products that will showcase the benefits of a smart meter such as plug in electric vehicles (PEVs), residential solar panels, etc. are the reference customers' utilities and their smart meter vendors need to reach and please first, before attempting to put a meter on every home. How can a utility put together a marketing & adoption plan for smart meters in their territory?

First, it's not about the meter -- write that on the blackboard 1000 times so you stop thinking about the meter (obviously some feature/function information needs to be included but the point is that the meter itself is not the value driver). It's about the job people want to hire a product to perform.

Second, find the Joneses and learn what version 1.0 electronic products they have or are likely to buy that will yield greater value if also attached to a smart meter. To find the Joneses and what products they buy let's use Boston as an example, NSTAR territory. The town of Weston, MA about 15 miles west of the city is one of the wealthiest in the country. It's populated by senior corporate executives, venture capitalists, and investment bankers who drive to work in the latest model import or SUV, cloth their children in this year's fashion, and are often the first in their office to have the latest i-whatever from Apple. These people are early adopters with the demonstrated willingness and ability to pay a premium price to be the first on their block with a Chevy Volt or Tesla, they are highly educated and wired so can go online and work through a not-100% perfected user interface to set up time of use pricing to make sure they get the best deal to re-charge their new electric car, and they are trend setters who will be followed by their cousin two towns over envious of the lifestyle.

In some cases, like the cable companies in the early adopter phase of installing cable modems, utilities may need a certain density of early adopters in a specific geographic region before the economics of installing smart meters makes sense. But as a cautionary tale, not all early adopter markets are alike. Early on, cable companies could not reach sufficient adopter density in the town of Concord, MA, even though Concord had all of the characteristics of early adopters, plenty of disposable income, highly education population, etc. But it was not until the demand for Internet service grew that the cable company could finally secure enough customers willing and able to hire a cable modem to send email and get online that the investment in infrastructure became sensible. Why did Concordians take so long to adopt this specific new technology? Follow up market research revealed that at the time residents of this historic town were largely writers and professors who did not see the value in cable TV because most people in town preferred to read.

Third, measure the impact of adding a smart meter to the purchase of an advance electric product (much of this has already been done but not necessarily integrated into smart meter marketing communications). Cost savings of a PEV compared to gasoline powered car, annual, 3-year, 5-year and what additional financial benefit if a smart meter enabled tiered pricing and consumers re-charged at night? Solar panels or energy storage? Energy and water efficient IP-enabled washer/dryer? The addition of a third battery powered cell phone or PC to the home network router connected to the cable modem and printer and the impact of increased use of home offices during business hours -- could the installation of a smart meter with tiered pricing enable a wired telecommuter to add MORE power using, time saving, productivity enhancing devices to increase their productivity at home while cutting their monthly electric bill?

Fourth, partner with manufacturers and distributors of those electric products whose products can increase in value if integrated with a smart meter. Back to Boston, in partnership with the local Chevy dealer, NSTAR could include a marketing package offering 25% off of a smart meter with three months of tiered service at half off for every customer who buys a Volt. Chevy could share customer data with NSTAR so they could follow up with a phone call or email to deliver a simple but compelling message -- you could save money re-charging your new Volt if you allow our licensed electrician to install this NSTAR smart meter on your home and move to time of use pricing. The cost savings if you re-charge after 5pm would be about $500 per year compared to refills with traditional gasoline. And you could use this Smart Phone app to track your savings. After 3 months, if you are not completely satisfied you could go online and switch your account settings back to standard pricing.

Chevrolet would, in turn, focus its Volt marketing on the town of Weston, MA with Saturday test drives at the local CostCo complete with a tabletop smart meter display staffed by an NSTAR marketing agent. Because of the geographically focused marketing effort GM could ship a few more Volts to the Boston area so they have plenty of product on-hand to support the joint campaign. And both companies could pay a team of Harvard Business School MBA students to monitor the progress of the overall program as their Masters thesis to be published in the Harvard Business Review to be used as an independent reference for future mass media press coverage.

Of the approximately 3,700 households in Weston, MA earning an average $153,000 per year, let's say just 10% or 370 homes buy a Volt and install a smart meter with tiered pricing. Each one of those early adopters would show off their new car to friends and neighbors initiating true viral marketing for GM (5 -- 10X the number of adopters). They would show off their Smart Phone energy and cost savings App to fellow office workers who live in nearby towns and are also likely early adopters or fast followers by nature of their professional association, initiating in-bound inquiries to NSTAR about smart meters and tiered pricing (another 10-15X the number of adopters). And these customers will start changing the time of day when they hire other existing or new products (clothes dryer, dish washer, etc.) to do other jobs in their house to increase their overall cost savings and demand profile.

Meanwhile, NSTAR could also negotiate a joint marketing effort with GE and other purveyors of electric powered equipment for the home, sharing the message and the cost of marketing a smart home appliance with a smart meter to help consumers be more efficient at home, and save money.

The Impact? Pleasing Early Adopters Moves The Whole Value Chain

What then happens in a few years in Weston, MA? These early adopters will be happy because they get to buy the hot new thing with an integrated device that reduces their total cost of ownership. Regulators should be sanguine because consumers have opted into a program that potentially lowers their bill while it helps the utilities meet energy conservation (and possibly RPS) mandates. GM will benefit because they are selling more cars in a prime geographic region, which helps drive down the cost of future model editions allowing GM to target a broader market. Smart meter vendors will be happy because they are shipping more units, and consumers aren't complaining to regulators about their product. And NSTAR will have a successful smart meter pilot that can be replicated throughout their territory and/or will spread to other towns through a positive, consumer-initiated message encouraging other NSTAR customers to ask if they too can hire this smart meter thing to help them cut their electric bill and buy a Volt like the woman at their office who lives in Weston.

Pretty soon, the local press will start writing articles about the Joneses on Main Street in Weston who bought a Volt, installed a smart meter, opted in to time of use pricing, and now save $500 per year and burn hundreds fewer gallons of imported gasoline. They also use an efficient smart washer/dryer from GE to wash their clothes at night saving water and money. The article will include a picture of their 16 year old daughter who just got her license behind the wheel of the new Volt, which she will upload to her Facebook account, prompting her friends to ask their mom & dad if they can have an electric car for their 16th birthday. And the reporter will cite the HBS case study detailing the business case and innovative integrated marketing and product delivery program engaged in through a partnership between NSTAR, GM, and GE.

… Ring Ring … ‘Good afternoon NStar. You want information about our smart meter program? Are you from the state public utility commission?’ … ‘No, this is John Smith. I live next to the Joneses on Main Street in Weston. I just bought a new Chevy Volt and want to use this discount coupon I got from NStar to schedule a smart meter installation.’

Imagine that!

References & Recommended Reading

1. What Customers Want from Your Products, Prof. Clayton Christensen et al, Harvard Business School Press 2006

Crossing the Chasm, Geoffrey Moore, HarperBusiness, 1991

The Innovator's Dilemma, Clayton Christensen, HarperBusiness, 1997

Related Topics

Comments

Yes, when people want the meters, let them ask for them.

Until then, stop the forced installation against the will of millions of people and against the will of a growing number of cities, counties, states and countries, in California alone, there are 36 cities and counties against the installation of so-called smart meters, 12 of them prohibiting the installations with Ordinances.

1. INSURANCE COMPANIES WON'T INSURE THE HEALTH PROBLEMS FROM WIRELESS Smart Meters

And Insurance companies don't sacrifice insurance premiums ($$$) for no reason.

TV NEWS VIDEO - Insurance Companies Won't Insure Wireless Device Health Risks (3 minutes, 13 seconds)
http://eon3emfblog.net/?p=382


2. WIRELESS SMART METERS TRANSMIT RADIATION APPROXIMATELY 25,000 TIMES PER DAY, 24/7, not 45 seconds per day as claimed by Utility Company.

VIDEO - Radiation Measured From Smart Meter Mounted On A Home (6 minutes, 21 seconds)
http://www.youtube.com/watch?v=uRejDxBE6OE


3. CELL DAMAGE, DNA BREAKS & BREACHES IN THE BLOOD-BRAIN BARRIER observed in laboratory tests from low levels of pulsed RF signal radiation as emitted by Wireless smart meters - reported by Top Wireless radiation scientists in the world at the Commonwealth Club in San Francisco Nov 18, 2010:
VIDEO - http://electromagnetichealth.org/electromagnetic-health-blog/cc-video/


4. THE KAROLINSKA INSTITUTE IN STOCKHOLM THAT GIVES NOBEL PRIZES ISSUES GLOBAL HEALTH WARNING AGAINST WIRELESS SMART METERS.
2-page Press Release:
http://www.scribd.com/doc/48148346/Karolinska-Institute-Press-Release

...AND in the U.S. and other countries where smart meters are being installed, energy use is NOT decreasing, customer utility bills are INCREASING, there are additional problems and costs incurred from increased Security & Hacking problems and the meters are creating electrical interference problems and motion detector device interference.

REALITY.
In theory, if you lived equally during the 24 hours of every day, you could save a few bucks PRIOR to SCHEDULED RATE INCREASES. But in REALITY (which is actually occurring where Wireless meters have been installed), people’s utility bills go up a lot and those that really pay attention and adjust their lives also have their bills increase, but by a bit less than most.

Awesome article Kenneth ! This article could / should form the basis of a Marketing and Sales 101 course that every new CONSUMER product developer in my industry should take (the high-tech electronics industry).

One point is not stressed enough in this article: consumers can save money on their utility bills by potentially buying into smart meters, tiered Time-Of-Use pricing, and most importantly the high-tech gizmos that make use of TOU pricing, but how will participating consumers know they have saved money on their utility bills had they not done so?

The answer in my opinion is to include real-time in-home energy displays for every smart meter. One that tracks your running utility bill, instantaneous power demand, and has access to historical demand and bill patterns either logged in its own memory or the utility companies meter database by communicating directly with the smart meter or the utility company. Then and only then will consumers have a tool that can resolve CONVENIENTLY their utility bills, and, most importantly, show the historical impact on their bills of specific gizmos they buy into that make use of TOU energy pricing.

As this article also points out, utility companies are not typically in the business of promoting or partnering to sell the high-tech gizmos to consumers, let alone providing consumers with financial tools like in-home displays. The reason is they are prevented usually by regulators from paying for such marketing intensive work or the much more customer support they would have to provide participating consumers, i.e. since their costs must be recovered from their only predominant source of income from billing.

Robert Williams concerns in his comment above about radio emissions from smart meters are not false, most state-of-the-art wireless meters do indeed have either a UHF or microwave radio in them. Depending on the manufacturer’s smart meter and wireless network system design, those radios can be actively transmitting very few or many dozens of times per day. However one must put that radiation in perspective…..

The radio emissions from an active cell phone presents far stronger microwave radiation exposure to a person considering its transmitter power is similar to a smart meter’s but the phone is held against one’s ear. I doubt anyone would see a need to put their head up against a smart meter for minutes or hours at a time.

Furthermore there are many other examples of wireless radio gizmos in widespread consumer use out their. To put it bluntly, the exposure to microwave radiation by a smart meter on the side of houses in a residential area PALES in comparison to all the other myriad of radiation sources we are exposed to in our everyday lives.

Correction ...."widespread consumer use out THERE."

"Second, find the Joneses and learn what version 1.0 electronic products they have or are likely to buy that will yield greater value if also attached to a smart meter." -- This article's premise is a recipe for never getting anything useful done with electricity markets. The problem with this article is it assumes that the present market system for electricity, or a simple TOU market addition, can ever actually deliver the incentives to capture early adopters.

But it can't, because the whole system depends on the widespread introduction of smart appliances which can operate to exploit the market incentives available, esp. refrigerators, A/C units, electric autos, water heaters, laundry and dishwashing equipment. The manufacturers of these loads will never integrate the necessary equipment untill there are standards, and to twist the author's paradigm a little, recall the "VCR wars" of the 1980's between Sony and Philips. Standards don't happen until one manufacturer worldwide out-sells the others, (or a regulating body with some common sense steps in, which the author implicitly argues against, e.g. "Leave all decisions to free markets", the dumb neo-con mantra).

We are never going to see "a) widespread replacement of fossil baseload generation with nuclear. b) integration of intermittent renewables generation above a bare minimum c) elimination of extremely costly inefficient rarely-used peaking plants. d) elimination of load management by shutting down our industries (a really stupid move)" until the electricity market can enable every customer to respond to market conditions in a sane manner. And THAT WON"T HAPPEN BY SITTING BACK AND WAITING FOR THE EARLY ADOPTERS to set a trend.

Whether they admit it or not, in EVERY jurisdiction regulators are responsible for setting up the market for electricity. And they are presently doing a piss-poor job of it, e.g. nothing about the market has improved since Edison sold DC. We need something like IMEUC (Independent Market for Every Utility Customer - see my articles this site), or very similar, now.

Excellent article hitting upon the real problem consumers have with smart metering. However, I disagree with the premise that better marketing would help at this stage. Your excellent marketing suggestions make perfect sense in a world where the end product has actual value to the buyer. The big ugly problem with smart meters and all the associated kit needed to deliver the TOU rates is that at the end of the day - the customer still gets the same old thing.

Consumers will flock to products that allow them to do something new - but the attachement of an EV, adding solar panels, or a fancy washer-dryer is not predicated on a smart meter. Smart meters will likely follow the implementation of these devices, not lead it. Lower rates would be a marketable benefit, but are unlikely as the costs of these implementation are massive and have to be paid for by the same consumers wanting lower rates.

Meters costs are typically spread out over 20 years, and new rules are allowing 10 years, but even this is not enough. As SDG&E recently discovered, in less than 3 years some of their portolio of smart meters was already obsolete and had to be replaced. This type of replacement cycle is actually normal for computers in the field, but would be a crippling additional cost for rate payers.

For Bob - you might want to be careful what you wish for vis-a-vis in home devices. Each of these little pieces of technology has their own support issues, particularly the customer-service burden. I hope that my utility decides to allow me to purchase any gadgetry on the inside of the meter from my local Best Buy or Home Depot.

There are great reasons on the utility side of the meter to advance the deployment of technologies (as with smarter transformers), but the benefits to the consumer fall flat. Some early adopters will play with the technology, but unless they actually get lower rates, the neighbors are not going to follow suit.

Len,

"The manufacturers of these loads will never integrate the necessary equipment until there are standards." Bingo!!!

There are ATTEMPTS being made at setting standards for all this stuff, in fact Washington’s dept. of energy had released a document for them not too long ago. But in fact all Washington did was describe a myriad of technical methods currently available from a variety of meter manufacturers and a variety of supporting communications products they make use of. Indeed there is no one single "standard" technical system mandated, so it isn’t any wonder why consumer appliance manufacturers aren't jumping on the bandwagon designing any extra smart-grid capabilities into their products.

Keep in mind consumer products are typically designed, manufactured, and marketed globally for the masses in millions of units per year. No large global dish washer manufacturer is interested in making 50 different flavors of smart-grid enable machine to sell into 50 US states all with unique utility smart-grid systems in place.

This is really very sad because in such a highly regulated industry like electricity distribution, the federal government is in a position to dictate one single standard. Why don't they do this? The reason is lack of money.

Because distribution utilities already have deployed such broad patchwork of smart metering types, and a variety of supporting communications methods as part of their smart metering systems, it would seem the feds are terrified of making obsolete much of the installed equipment out there in the field already. If they did, it would cost the utility industry a fortune to replace most of it just to satisfy meeting a single adopted standard. And the feds are not prepared to give them massive handouts to do it, nor are they prepared to permit regulators a free hand in allowing massive consumer rate hikes to pay for it.

So this is clearly a huge dilemma. Your IMEUC proposals Len would make a fantastic system standard and electricity market standard. But just try and convince the people controlling the purse strings in the utility industry, or the regulators, or the people in government that this should be done. I can tell you their response – as long as it wouldn’t cost anything or cost very little.

"but the attachement of an EV, adding solar panels, or a fancy washer-dryer is not predicated on a smart meter."

Technically speaking your statement above is true Gay. Consider though if the principle motivation for a consumer to buy into these things is to save money on their electricity bills, most consumers will eventually buy in provided they can be SHOWN how much they're saving. Just telling consumers in advertising how much they will save won't cut it particularly when a large percentage of consumers don't trust their utility company’s claims let alone claims by the manufacturers of these new gizmos.

Remember electricity bill savings from adopting these gizmos also depend heavily on the lifestyle habits of individual consumers. If I and my neighbor buy the same fancy smart-grid-enabled washer-dryer, our savings won’t be exactly the same except by pure coincidence.

The trick in proving the savings to consumers is to actually measure the savings in some automated fashion, and feed that information back in a convenient manner to the consumer. This can only be accomplished by tracking energy bills in real time, and relating its patterns to specific loads the consumer uses, and comparing them to past energy use patterns. In other words it means equipping consumers with interval (smart) meters and real-time in-home displays that can communicate with the smart meter and the appliance loads of interest.

One huge problem with any "a little bit of early adopters first" approach is that a very significant proportion (about 50%) of the total cost of implementing a real smart meter system is in the cost of the back-end software and servers. It is clearly not logical to hope these costs can scale with the number of users. It is also clearly not logical to build these with a cheap design initially which can only accomodate a small percentage of the eventual customer load, instead they must be installed initially with capacity (and one-time costs) for the entire eventual customer load. That means that one can never expect a few "early adopters" to cover the back-end costs. It is also a lot cheaper per point to replace all meters in a region at once rather than scheduling custom trips to each customer individually over a long time period. It is clearly far more cost-efficient for mplementation to be all or nothing, to the poiint where that's likely the only way it will ever get done properly. Anything else will simply be a costly waste of time and money, especially the back-end software.

Right you are Len.

Until the regulators and governments recognize this and give the utilities the money they need, or the means to raise the money, to implement an all or nothing system, we wil continue to see systems inmplemented that soon become obsolete, and the deployment of newer systems proceed at a snail's pace.

Great article Kenneth. Leading with stimulated demand and not enforced supply is a great way to allow consumers to warm up to smart metering. It’s a shame that emission reduction targets are fast approaching though and as smart metering projects are part of reduction initiatives, governments across the globe don’t seem to have the time to allow the natural adoption. Perhaps more aggressive marketing and PR strategies are needed to really spark demand, so far smart metering marketing targeted at the consumer (in the UK at least) seems a little confused.
Kate
www.aspectuspr.com

Here's a wild idea for the utility industry people to consider......

The vast majority of smart meters deployed out there are being used primarily as interval billing meters. One can also appreciate that utility companies don't want their customers messing around with them attempting upgrades to them to add various other features. Nor do utility companies want the unbearable costs of replacing them very often simply to upgrade them.

So my suggestion is first let the utility companies deploy basic interval smart meters to all their customers. Then give all customers the option to RENT upgrades to their meter for all the features that enable customer smart-grid functions, like demand response automation, in-home displays, or billing communications for electric vehicle charging, etc.

The customer would assume all the responsibility to buy into future meter upgrades as the technology changes. The customer would pay for the house calls to upgrade the meter hardware if need be, or for software upgrades by having their utility download it to the meter through their AMI network (as some smart meters are capable of). This would be no different than renting a cable-TV box from my cable provider, and later having it replaced or its software upgraded whenever I choose as newer technology comes onto the market.

In this scenario the meter would still belong to the utility company but now the customer shares some of the ownership. Customers could be engaged far better in the technology's adoption because they would now have a choice whether to put their own money into it for their own use. Then and only then could this technology properly SELL to customers the way any other consumer technology sells.

Of course this would require a much higher level of individual customer service from utility companies - something which our cable-TV and phone companies have perfected to an art.

Microcontroller hardware and software vendors see a BIG market in smart metering.

One focus is on low power.

We see a potential for a big mess for a variety of reasons.

Hardware failures because of poor design.

Software failure and inability of update code.

Real mode C/assembler opposed to Virtual Machine implementation technology.

Here is a SECRET link I'm using for microcontroller hardware development

http://www.prosefights.org/cs/canodb/canodb.htm#cvsforth

Third out of five Belkin 7-port powered USB hub returned because of failure today.

Video lectures today on USB diode protection and flash and rotating media file fransfers, Part A, B, and C can be found here.

http://www.prosefights.org/unmineable/unmineable.htm#scholle

Also at above link,

Commonwealth Associates, Inc. electrical engineer Frank M Currie wrote

To attempt to address your heat rate questions, the term "heat rate" from an energy production perspective refers to the amount of energy a plant produces for every unit of fuel that gets put in. Specifically, it's the number of BTU's needed to produce one kilowatt-hour of energy. So strictly speaking, I would say that heat rate has no real meaning for solar PV or wind, since nothing's being burned. The efficiency of these technologies matters, of course, in that one wants to get as much energy output per unit input as possible. It's most important implication is how quickly we burn non-renewable resources to generate electricty. So heat rate is really an expression of (thermal) generator efficiency that doesn't have an immediate analog in renewable techonologies since we don't consume non-renewable resources in the latter.

PNM Director, Advanced Generation Development, Greg Nelson wrote,

Heat rate is the amount of Btu's of fossil fuel burned to generate kWh's of electricity. Since CSPs don't typically burn any fossil fuel (unless they have supplemental firing), the term heat rate does not apply to CSPs. I have included a definition of heat rate that I got off the net for further clarification.

A measurement used in the energy industry to calculate how efficiently a generator uses heat energy. It is expressed as the number of BTUs of heat required to produce a kilowatt-hour of energy. Operators of generating facilities can make reasonably accurate estimates of the amount of heat energy a given quantity of any type of fuel, so when this is compared to the actual energy produced by the generator, the resulting figure tells how efficiently the generator converts that fuel into electrical energy.

Truth of Nelson's statement 'Heat rate is the amount of Btu's of fossil fuel burned to generate kWh's of electricity.' is questionable because the above PNM foil, data apparently show Geothermal as having a Heat Rate of 29,050 BTU/kWh. Nuclear 10,510 and Nuclear (PV Lease 10,420 Acquisitions).

Some of the data in that foil was apparently supplied by EPRI.

Large scale solar generation of electricity is a fraud I was told by a liberal arts educated vice president of a large wall street investment bank several years ago.

That investment bank was reported to have lost $24.1 million of the well over $1 billion lost by investors in the Eclipse Aviation bankruptcy.

Post

"It is time that the state take control of this increasingly important issue."

Supposition that the state of New Mexico is utitilzing individuals' advice who have expertise and ability in the area of electric power generation is suspect.

We recommended that the state 1 Contract with NM geologists to attemp to forecast future BTUs available for electricity generation 2 Establish a board of those qualified to evaluate whether proposed solar or wind electric generation technologies are a scam or not.

http://home.comcast.net/~bpayne37/pnmelectric...

There is a LOT OF MONEY to be made developing and selling alternate generation facilities to those who do not understand the laws of thermodynamics, HEAT RATE, and CAPACITY FACTOR.

suggests oppotunity for fraud.

Response to above statement


fast neutron
Santa Fe, NM
January 12, 2009

From actual experience, wind farms produce 1.2 watts per square meter. Solar Thermal and Photovoltaic methods capture 5 to 6 watts per square meter. There is no economy of size in either technology. Dividing the watts you need by those values gives the land area in square meters needed to produce the juice. The numbers are astronomical

http://www.topix.net/forum/source/santa-fe-new-mexican/T0QVJ5UD3R25C8HRL

appears to confirm suspicion of fraud.

Boy is your analysis off the mark. Your trying to relate television, cable and phone service to time of day metering. Those are media products for the enjoyment
of watching TV, movies or talking to friends on the phone. A smart meter provides none of that.

Then for a test city you pick Weston, Ma, average income $153,000. People who do not care what theit electric bill is and will probably profit financially somehow from smart grid technology. What about Detroit, Michigan? Or New Orleans, La. Or cities where the 50% of American workers are who live paycheck to paycheck. These people cannot afford to replace their appliances with ones that
can turn on at midnight to wash and dry their clothes. They will not afford to pay
25 cents per kWh to have their window air conditioner run when its 90 degrees outside.

How is time of day metering going to be applied to schools, hospitals, grocery stores, super stores, office buildings, banks, shopping malls, etc. or is the real-time pricing only going to be on the backs of residentials.

The only ones who want it are those that are going to profit from it. Utilities have been after real-time pricing since the oil companies got real-time pricing for gasoline. There is no benefit to the customer. They will pay higher rates which have nothing to do with the actual cost of producing the electricity.

Jerome,

"They will pay higher rates which have nothing to do with the actual cost of producing the electricity."

You are absolutely right about the higher rates coming with TOU or real-time pricing. In case you haven't noticed, electricity costs are going way up too with all the wind mills and solar farms springing up that are much more expensive sources of electricity than nuclear or fossil fuels.

So Jerome, when your electricity bills were to say double or triple over the next ten years, I wonder if you or anyone else will still shun those fancy new appliances that you say no one can afford to buy today. My bet is you'll be looking to save every penny you can on your energy bill. And when your old pieces of junky appliances reach their end of life and need replacing, you'll be the first to go begging to the store for those fancy new ones that will save you some money by turning on automatically to price signals or TOU rates.

And you'll wish you had a smart meter on your house that can handle those fancy new appliances, to the point you'll likely be calling your utility company to ask for one.

Bob, when I read “And you'll [i.e. Jerome] wish you had a smart meter on your house that can handle those fancy new appliances, to the point you'll likely be calling your utility company to ask for one.” I realize there is very little overlap between your world and mine.
Now I’m not trying to be argumentative but what do you mean by “fancy new appliances.” Fancy, like meaning a refrigerator that has an ice water spigot? New in the sense of having lower energy usage by virtue of more heat transfer surface.? or new in the sense of a foot massager being something you never had before? Now I have to confess getting new kitchen appliances because my wife wanted white, not avocado. (and besides, the dishwasher had a noisy bearing.)
Now except for people in the business and (alas, some) engineers I don’t think very many people know what a KWH is, how much one costs what they look like nor how many they use. And it best not to try and tell them. In fact I’m not so sure all these engineers who only deal in milliamps, circuit boards and computer programs know. A different breed. Asking people if they want a smart meter is almost meaningless. Must be better than a dumb meter – and what’s a meter? I recall when you bought a car you could opt from several rear end ratios, i.e. number of engine revolutions per wheel rev.4.11 was good in mountains, 3.54 had better economy and quieter, and 3.00 required much downshifting to avoid lugging. Today try to find a consumer who knows about rear end ratios or even a car salesman.
I have blanked out as to where I saw it but I saw a devastatingly negative article about smart meters recently. It dwelt on health issues Together with not seeing how a smart meter would save me real money I think it is going to be a hard sell. So tell me, why would I wish I had a smart meter? Sure I would like to see the data - but like the instantaneous readout we can get of mpg every second, it hardly changes anything. People drive the same regardless. I have yet to see anyone except myself observe mpg readout. But I have found that many do not even know or have forgotten they have the feature.

Don,

Most average consumer know what a meter is and that its purpose is for utility billing, whether it be electricity, NG, or the meter on a gasoline pump that practically everyone uses and understands.

I'll grant you consumers may not know exactly what a KWH is, but they sure know what their utility billing rate is in cents-per-KHW. Everyone also understand the more KWH's they use, the more they pay on their energy bills.

Any modern in-home energy display shows your running energy bill in addition to the KWH’s being used and the instantaneous power demand in Watts. In essence consumers don't have to know how many KHW's their meter has logged, just how much it is costing them and at what rate in cents per hour they are consuming.

Furthermore it is clear you don't really grasp what “demand response” means in the new fancy appliances we're talking about. They're essentially the same as the plain old appliances but with a radio (or other form of electronic network communication) designed into it, plus a programmable computer built into it that allows the owner to program it when and under what energy price conditions to automatically turn on or off.

The built-in radio communicates with the utility company's smart meter (or with the utility’s office system through some other network) to get real-time electricity prices. The consumer programs the appliance to come on at an appropriate billing rate price level they are comfortable with paying, or conversely program them to shut off if the price jumps above some price level they are uncomfortable with paying. This is pretty simple for any consumer to understand who has used programmable timers for example.

Don,

I don't mean to be insulting, but if you and most consumers cannot understand what I have just described above, the nation is in a pretty sad state with a very poorly educated public. Frankly I don't believe it is in such a sorry state because my industry wouldn't be selling the millions of smart phones and personal computers every year in North America if we were all so dumb. Smart phones and personal computers and their software are far more complicated machines to understand and use than monitoring one's energy bill or programming these fancy new smart appliances.

Don: You should compare your ability to that of these "dumb young'uns" regarding the cost and usefullness of the myriad of features and capabilities of todays cell-phones. They'll make you look like the dummie.

Don,

Take what I have just explained about monitoring one's energy bill in real time, and using real-time prices to enable and program smart appliances for demand responses, then picture adding just a little more technology.

Under Len's IMEUC market proposals, consumers would have the additional luxury of choosing the grid generator’s electricity price of their choice based on competing generator wholesale prices for available generators on the grid. They could later switch to another more competitive generator if desired. This could all be automated if the consumer could communicate with the grid in real time, since naturally no one would want to sit in front of their computer screens 24 hours to do this manually.
This level of automation would be a piece of cake for software developed to implement this on today's computers, and with a bit more technology built into smart meters,, and with the grid communications put in place for all the grid’s generators to participate.

Effectively this would be another way for consumers to minimize their energy bills without draconian changes to their lifestyles.

All of these arguments pre-suppose that we even agree on the goals of “smart metering”. Let’s set out the goal of reducing costly peaking plants and the need to avoid building more power plants through better use of the infrastructure already in place. These are real goals with tangible costs.

What does a “smart meter” contribute to the delivery of these goals? What alternatives exist for reducing peak demand? Do the costs to reduce peaking exceed the costs of the current methods? Does the investment in smart metering (and all the associated costs for software, services, maintenance, and mistakes) deliver the intended result?

Consumers do understand a KWA and how to control their costs by turning off lights. Real time energy use is calculable without a smart meter. Anyone can go watch the meter spin. The step that is missing is the connection of the spinning to costs of operation by model. Calculations of costs can be done with a chart of typical products and the usage costs calculated based on the published rates. Decidedly low-tech but meets the information needs of the consumer.

Similarly, a low-tech approach to peaking is to set rates that change depending on time of day or season. Consumers readily adapt to programs that discount for usage at off peak hours. Anyone remember making long-distance calls after 5 pm (or 10 pm)? How about water utilities requesting irrigation on odd/even days at 3-5 AM? Electric utilities can shift load to evening hours in the summer without smart meters – they only need a published rate structure that matches the local needs. Marketing then makes sense when variable rates offer a legitimate opportunity for the consumer to save money.

The question then becomes how much more effective are “smart meters” and all the associated (and hidden) costs in reducing peaking needs and shaping load for better utilization. If the low-tech approach reduces peaking demand by 10% and the smart-meter approach reduces peaking demand by 12% - is that an economic proposition? How do we know and trust the analysis?

Gay,

"The step that is missing is the connection of the spinning to costs of operation by model."

This missing step would be simple to implement with smart appliances that communicate with the customer’s smart meter and/or with a real-time in-home display.

Although it is technically possible for consumers to watch their meter spin and manually calculate their bills whenever they wish, it is highly impractical to do this manually to update yourself on a daily or hourly basis unless you have nothing better to do with your time. Hence the need for real-time displays and computer automation.

I agree ONE of the goals of smart metering is to reduce the need for costly peaking plants, BUT it's not the only goal. Consumers are being told the smart meters will somehow benefit consumers too, as a way to justify consumer's bills increasing to pay for the smart meters, and to justify going on "low-tech" Time-Of-Use (TOU) billing rates, or alternatively real-time pricing.

Indeed here in Ontario all 5 million utility customers are already on low-tech TOU rates with smart meters, but the bill savings being realized are not as significant as hoped for many customers, especially those who cannot easily change their energy use habits. Part of the problem is the rate differential between peak and off-peak times are not set wide enough yet to make a big difference in energy use habits that would lower energy bills for most consumers.

So Gay, if you want to sell smart meters to consumers as the subject in this article, consumers must be much more heavily engaged to buy into them. And that means making the benefits of smart meters much more visible to consumers, one way or another.

Len wrote “Don: You should compare your ability to that of these "dumb young'uns" regarding the cost and usefullness of the myriad of features and capabilities of todays cell-phones. They'll make you look like the dummie.”

You are absolutely right about my profound ignorance of hand-held electronic devices. (It might look like the phrase “dumb youg’uns” is being attributed to me – it is not mine.) While I am a poor speller and agree with Mark Twain that anyone who spells a word only one way lacks imagination I do notice that in just your one sentence you have spelled three words incorrectly, (usefullness, days, dummie, at least according to my spelling checker – which saves me from sending out many more embarrassing errors than I do. I am a bit puzzled why you chose not to use such a marvelous program?

I can say without the least hesitation that my schoolmates knew far more than those of today and were far better behaved. Here are a few examples of present ignorance that come to mind: Among graduating seniors at a Baltimore HS only about half could find France on the globe, a professor at a prestige California U. found that not a single student in an advanced English literature class could in ANY WAY identify Beowulf or Chaucer, in Britain less than half the students could name the PM during WWII, a teacher in California could not identify James Madison beyond that he was an early minor president – while teaching American history at James Madison HS, a man on the street interviewer could not find anyone who could solve the poser, what is 50% of 70? Several college grads excused themselves saying,” I was not a math major”, Almost nobody today can name the states bordering their own state, only about half of American students can place the Civil War in the right century. We hear such as, “Me and him don’t got none.” And they go uncorrected!! I am not kidding; educators tell us it might damage their self-esteem. Today we see in highly edited Time Magazine “none of the students ARE going” wrong, it is none IS going. (I am not a hot shot, the last English class I had was as a junior in HS and I was not an A student.) Speaking of grades: My HS graduating class of 353 had a four year straight A student (most graduating classes had none) a legend at 18 and aptly named Arthur A Anderson.

I just answered a telephone call from IBM. The caller could not pronounce my name and laughed nervously. I don’t think this ever happened during the first half of my life. Today it is the norm. I often get phone calls such as from a dentist’s office alerting me to an appointment the following day. Sometimes I don’t know what they are talking about unless I recognize the dentists’ name. Other times I have been forced to say I cannot understand you. In first grade we were taught to speak clearly and probably enunciated our best in the low grades. Often when a kid is asked what 4 X 8 he reaches for his calculator. I don’t hear kids having conversations. You can’t call oohs and aahs about an electronic game conversation. Few kids have the benefit of exposure to a newspaper in the house and don’t have a clue as to what is going on in the world beyond computer games. Even college students need several like ya knows to complete a sentence ya know. It has come to this: I now say in the hands of children smart phones, computer games and calculators do more harm than good.

Don,

You remind me of my late grandparents and parents. Anyone over 60 or 70 is typically either fearful or mistrustful of most hi-tech gizmos, and in general are loathed to use or learn how to use them. They would much rather have nothing to do with them when at all possible.

I will also grant you today's children miss out on learning much of the basics in school when so many subjects are taught computer-assisted. I was lucky enough for example to be taught how to do long-hand arithmetic on paper, and later learned slide rules and then calculators and later sophisticated CAD software for engineering calculations and simulations, so I fortunately understand the basics behind software. Many of today’s graduates don’t, but it doesn’t scare them from using computers and any other hi-tech stuff.

Len,

There will always be a segment of the population who generally oppose any suggestions of adding more hi-tech to anything, but over time sthis egment is surely shrinking. I’ll bet the utility industry is full of them too, unfortunately.

Don: Your lament about our grandkids capabilities is like electricity metering, all a question of "What do you value?" Believe me or not, the kids today have at least equal raw mental capacity to those of our generation. That you disagree with them on what to apply it to simply indicates you're likely an elder. T'was always thus. Should an average person these days bother to stuff their memory with the rules of math when electronic tools are everywhere? Map data when GPS ditto? Grammar rules when electronic spellers and grammar correction ditto? Should I bother to fire up a spellchecker when everyone knows exactly what I'm saying? All a matter of opinion, and for the kids theirs counts more than yours, because it's their minds.

Gay: A simple fixed TOU rate structure can only capture a small part of the potential benefits of a really smart metering / marketing system. 1) Off-hours rates should vary dramatically depending on levels of wind generation available. TOU metering can't help increase the percentage of wind generation or other variable renewables exploited. 2) The required peak price to ensure sufficient back-off on really hot midsummer days is MUCH higher than that required simply to keep peakers shut down on a cool spring day. Price needs to change FAR more often tahn any TOU system can provide, and expecting customers to simply manually react sufficiently to realtime pricing is ridiculous. Electronics is readily available today at ver cheap prices to take care of it all for us. 3) The metering system should interact constantly with electric auto chargers to a) allow charging at any location with billing to the correct account. b) allow price-based backoff of auto chargers if a grid failure / renewables drop-off / very hot summer day occurs. Auto owners can program their car one-time to set the rate max they're willing to pay, eg. plug-in strong hybrids can choose to not charge their batteries at all if the cost of electric energy exceeds their cost of diesel or gasoline, not that uncommon on hot summer days.

The basic premise that " ... consumers really don't care about electricity use ..." is badly flawed. Consumers care about their electric bill.

There is simply no question that utilities are pushing smart meters so they can charge more (vis-à-vis time of day metering). The argument that the consumer can "save money" only applies in the peculiar and contrived world of "time-of-day" metering championed by a utility that is a monopoly.

As observed earlier, to compare "smart metering" to earlier introductory technologies is also badly flawed. The benefit lies solely with utility, with nothing but higher bills for the consumer.

I suggest that utilities stop trying to tell consumers that it is raining while they pee on our backs.

Michael,

You are correct, smart meters being deployed today along with TOU rates are being pushed onto the public so utilities can generally charge more overall, among other reasons. To use the word "savings" is perhaps a misnomer therefore, in fact, by load shifting under TOU of use rates enabled by smart meters, consumers may never see their bills shrink any lower than what they were paying on flat billing rates.

The whole point of promoting "savings" on bills should really be stated as promoting the means to MINIMIZE your bills. If you don't do anything to change your energy use habits, i.e. if you do no load shifting at all, your bills will be guaranteed to eventually increase under TOU rates, and probably quite painfully down the road as TOU rates ratchet steadily upwards with all the renewable source generators being rolled out on the grid, and looming expensive rebuilds of aging nuclear plants.

Want proof of what I am saying? Here in Ontario, years before our provincial government forced our distribution utilities to deploy smart meters and TOU rates onto all 5 million customers by the end of 2010, they did billing data studies using computer software and smart meter pilot programs. By collecting hundreds customers’ demand profiles from smart meter interval data, they could on computer calculate each customer’s bill under the existing flat rates, and then calculate their theoretical bills applying various TOU rate levels. All of the pilot program customers of course were still on flat rates for their actual bills, where the flat rates were around 7 cents/KWH.

What they discovered was by setting a ratio of peak-to-off-peak rate of about 2-to-1, and making the off-peak near 5 cents, on-peak near 9 cents, with mid-peak near 7 cents, theoretical TOU bills on average would be the same as flat-rate bills within a few percent. So initially as TOU rates started rolling out last year, the political decision was made to use these rate levels so most of the public wouldn’t notice any significant changes in their total bills.

In reality however the regulators have allowed TOU rates to further increase over the last year such that now our off-peak rates are now nearly the same as the flat rates used to be. The result? Most customers’ bills have gone substantially higher. Furthermore, the provincial government has publicly admitted that energy bills are due to rise much faster than inflation to pay for all the “green energy” renewable generation rolling out that they are heavily subsidizing. Studies have been published that say an average bill will go up by nearly 50% over the next five years in Ontario. This has been generating widespread anger and frustration with consumers, and it’s turning into an election issue in Ontario’s provincial election coming up this fall.

You can bet the same thing will eventually take place in many US states and other provinces rolling out smart meters and TOU rates.

The smart meters and TOU rates are being advertised as way for you to “save” money on your bills by practicing load shifting. Trouble is you have to practice quite dramatic load shifting and lifestyle habit changes in order to save anything substantial. But by practicing moderate or little load shifting, your bills can still be lower than if you did nothing, so it becomes a matter of what a customer can tolerate on their bills before they will change their lifestyle habits.

I have been preaching on this website that over the next 10 years or so, we are likely to see our bills double or triple to the point they become comparable to some consumers' mortgage payments. In this scenario many will be looking for any way they can to reduce their energy bills, including embracing more load shifting, demand responses, buying more energy efficient appliances, etc., etc.

Bob and Len
Your criticisms are a disappointment. I would have thought that you would have realized I had taken into consideration all your points long before I wrote. To the contrary, we have never been here before: More schooling, less education and growing progressively dumber, more venal and less collegial.

One of the biggest problems with "Saving via TOU / better" metering is the large flat-rate charges also included in utility bills. Distribution fees, renewables support charges, sales taxes all take up about 50% of my bills at present, leaving not a lot of space for load shifting with real-time or TOU rates to contribute. In future, all the flat rate charges are due to increase, so don't plan on any system causing your bills to go down, especially if you're planning to plug in your car, as most will be doing eventually.

What is true is that with a smart meter / market system, your bills will be "lower than they would have been otherwise".

Precisely Len.

The distribution fees also vary considerably from one local utility company to the others, and all of them are calculated by some unique formula based on the energy portion of the bill. Even if your energy consumption drops to zero during a billing period, like some who close up their northern cottage during the winter and shut off their consumption. there is still a minimum distribution charge.

This is another reason why real-time monitoring could be so useful for consumers, to help them understand when and how much impact they can have on their bills as they explore changing their energy use habits.

From time to time I have to remind myself that some of us have vested interests in the issues discussed. Some favor more government involvement in regulation, subsides, government financed programs and tax policy inducements than do others. Those who stand to benefit, even peripherally, from smart grid, smart appliances, and smart meter programs quite understandably have a different perspective than those who don’t. That’s fine, as it should be, but we need to keep this in mind.

For full disclosure, Don, I can see no way I can benefit from any smart meter installation or strategy. I've freely put my analysis into the public domain, make my living from developing computer software on contract for large unrelated businesses, and have no investments in any related areas. Of course I believe that, just as every other customer, I would benefit significantly from an IMEUC implementation in my region, if that's what you're talking about.

I agree completely Don, there are many who will benefit from smart grid, smart appliances, and smart meter programs, and many who will not.

Two things are pretty certain Don. Within the next 5 years or so you can count on the majority of us in Canada and the US to be given a smart meter and some form of TOU rates by your utility company whether you want them or not, provided there are no litigations that prevent the utilities from deploying them.

The other certainty is substantially increased electricity bills through higher overall TOU rates.

Now if you are one of the customers who want nothing to do with them and are disinterested in changing your electricity consumption habits, or are disinteresting in learning more about how to do so either through technological means or otherwise, prepare yourself for much more pain in your pocketbook. If instead you are prepared to change your habits to some degree, then you stand to benefit from them by less pain in your pocketbook, relatively speaking. I would say this is pretty simple to understand isn’t it?

It won’t matter if the smart meters are government subsidized or paid for by specific extra charges on your utility bill, or simply by higher energy billing rates, virtually all utility companies in North America are either studying, deploying, or considering deploying smart meters. If this makes you unhappy or angry, all I can say to you is, grin and bear it, life is tough more often than we would like it to be.

Bob, I know you carefully avoided saying it in so many words but some might think you have characterized me as a Luddite and a wastrel. That’s kind of funny as I have often been criticized for energy frugality, but they used less polite words than frugality. I have been guided by Carnot even before I discovered thermodynamic reversibility and Carnot about 1946. Seems I had been so hard-wired.

I have so often said that I opted for my electric co-op to turn off my heatpump/AC and water heater during near-peaking conditions for many years that if I mentioned it once again I might deserve to get bopped in the nose.

I suggest that any disagreement we have is not of kind but of degree. I have suggested numerous times that all the electronics in the world would not make much difference in my electricity usage unless you would have me toast my muffins at 3 AM – at least beyond what my co-op has been able to do for many years. Compared to oil depletion, water depletion, world food supply, I find the prospect of higher electric bills not nearly so scary.

Don, I'll grant you that oil depletion, world food supply problems brought on by rising oil prices and climate change, or water depletion, are definitely much more scary. Some believe, like Dr. Banks, that much more nuclear electrical energy supply is part of the solution. He's right but the pathway to get there will be long and expensive and fraught with public and government reluctance.

When it comes to changing one's electricity consumption habits through demand responses or through load shifting to off-peak hours, or buying more efficient loads, most consumers don't want to be bothered. We've all been blessed for so long by cheap electricity that it never mattered much... until now. All I'm saying is that technology through home automation and smart meters can help make things easier to deal with it for those that can’t be bothered to do things manually.

Ideally the best scenario would be Len's IMEUIC market reform proposals with full automation through technology, such that we could each shop automatically for the lowest electricity rates 24/7, and all grid generators would be forced to compete with each other all the time, instead of some getting lucrative subsidies from the public purse.

Bob, it’s better but we are still not connected. The brutal truth is that I don’t know one person who knows beans about energy to the degree that I do. Some are even engineers, engineers in name but who seem to only know about electronics. (I’ll regret saying this.)

With all my knowledge how would I decide when to dry my clothes? During the day peak hours some of my electricity is generated by solar and wind contributing albeit at high cost. At 3 AM none of my electricity is generated from wind and solar. Disregarding the convenience issue, when should I dry my clothes for the benefit of mankind? Is it a different answer if considering my electric bill? How should my smart dryer decide?

Don: "When should I dry my clothes?" -- Under IMEUC, the answer is simple. Whenever the meter decides the market price fits your pre-set willingness to pay. That also covers your local solar and wind generation, since if the locally generated power is not used at your site, it is sold into the market presumeably at a higher price than you're willing to pay for clothes drying.

Yes, I understand the scheme Len but it gets terribly complicated in practice. My dryer also has to know that I need dry underwear before a certain time on certain days no matter what the cost. And I often don’t want the dried clothes to remain in the dryer for hours. Maybe there is a still-damp towel. For my wife the whole dryer thing falls apart as she as she requires taking out and hanging certain items all through the drying process. We often have more than one load. OK, we would not want a smart dryer. But then, I don’t think we would want a smart oven, nor TV nor computer nor toaster nor washing machine nor freezer either.

Don,
Even without the smart appliances, wouldn't it be nice for your computer to automatically shop for the lowest electricity prices on the grid 24/7 to minimize your bills under IMEUC?

Here in Ontario we may not have an IMEUC market system, but we do have low-tech TOU rates. Our TOU rates are fixed for fixed periods of the day, so many consumers want the ability to load shift automatically, at least by programming their dishwashers or air conditioners to turn on just as the off-peak prices kick in during the evening for example. On weekends and holidays we are given a break with off-peak rates all day, when these timing functions are not needed on just these days.

The regulators may change the TOU periods too in the future, like for example in Ontario the off-peak price was set to kick in at 10:00pm weekdays, but later the government chose to switch them to kick in at 9:00pm instead. This is another reason for wanting the appliances to communicate with grid prices and thus handle this sort of thing automatically. Moreover consumers tend to be skeptical of performing simple load shifting unless they know how much it will save them on their bills, and this is where electronic feedback from a real-time in-home display would come in handy.

Ok Don, many present applicances aren't suited to a load management strategy, but many more could be without disturbing your day. Refrigerators and freezers, for example, could spend overnight cheap periods freezing a block of ice kept near the top of the machnie or between the freezer and refrigerator sections, then use that on-peak to load-shift. A/C units and heat pumps could pre-heat or cool a large internal thermal mass in your home (basement floors are an excellent candidate). Plug-in autos are also an obvious future candidate.

For the dryer, if it will upset your routine too much then you will simply have to pay the going rate, but don't be too surprised if it turns out under IMEUC to occasionally get very high, when the one-day summer peak happens, or a large generation unit fails. For those times, a smart controller which refuses to let you use the dryer when the market price is above say $0.50 / kwh (user settable) might still be a useful feature.

Of course all appliances should come with simple over-ride buttons or temperature settings, e.g. the fridge and freezer temperature-dependent, the dryer with a push-button, so your wife might even choose to pay the $0.50 / kwh if she's late for a meeting and needs those stockings. That's when an interior price display like Bob's wouild really be useful, making those decisions.

I find the rate you cite, 50 cents/KWH, unrealistic. My incremental rate is about 9 cents. I would expect high/low rates ratio to be more like 2:1 penalty, in which case my dryer load would coast me say 18 cents vs 9 cents. The computer really ought to advise stringing a clothes line at your rates. Sssh, my wife would not be pleased.

When you consider the literally billions of people who use little or no electricity today at low rates how will they be able to use any at all at higher rates? Don’t forget coal burning generating plants are being built like crazy all over the world even if the wind farms get the press.

As to making ice in your freezer during low rate periods would be both thermodynamically and economically inadvisable. Removing water's latent heat at 32 F with a working fluid at 0 F or lower would be a very low COP process as it is so far from reversibility. And it only gets worse, in the summer all the extra heat generated by the freezer would have to be removed by the A/C. If memory serves, commercial ice plants use ammonia as the refrigerant at 27 F. Nice fit.

Regarding the $0.50 / kwh, yes it is unrealistic under any regulator's TOU rate structure, because strictly regulated markets cannot respond to real market conditions rapidly enough. But that's exactly what IMEUC is designed to do, bring real market conditions to every customer.

Don,

Consider gasoline prices. They're very much in the news lately reaching the same record high levels as in the summer of 2008, the last time oil prices climbed as high as they are today...and still climbing.

One could argue that gas prices we pay at the pumps every day are essentially very close to real-time market driven. When oil prices change, pump prices across the country are adjusted within a day, sometimes within hours. This is in spite of the fact the oil used to produce the gas in the pumps was refined and stored there weeks before.

Don’t tell me a lot of average consumers are not feeling any pain right now in their pocketbooks because of the skyrocketing prices. And, you can bet a significant percentage of consumers routinely go out of their way to shop for the lowest price station, even if the difference is only a fraction of a cent per gallon (or per litre) from other stations, especially during times like this.

How can consumers do this so easily and so routinely? Because the gas prices are advertised with very tall in-your-face signage at each station, typically visible to oncoming drivers hundreds of feet away.

A real-time in-home energy display that also communicated the current electricity rate, whether they be low-tech TOU rates or real-time grid wholesale prices, would be guaranteed to have similar effects on consumers. The effects would be seen either as modified consumption behaviors, or for example under Len’s IMEUC market system their computers could use the information to shop for lower prices automatically or run smart appliances automatically for the consumer.

Refrigeration circuit cold temperature is all simply a matter of suction pressure on the compressor's intake side. Lower the pressure, colder the operation, see e.g. the large food processing facility where I used to manage IT and instrumentation. All systems, from blast freezer at -40 C to icemakers at -5 C to space cooling at 10 C were ammonia circuits. The difference in efficiency is the additional mechanical power required to raise the very low suction pressure of the -40 C liquid amonia vapours to the higher suction pressure of the warmer liguid amonia vapours, less than 1 bar and not a huge energy penalty. A really smart fridge manufacturer could figure out how to vary the freon circuit charge pressure to optimize for any conditions, but there's no incentive now.

Getting back to the theme of this thread - the issue was "marketing" smart meters.

The big picture I see emerging from the discussion is that smart meters without TOU rates are very expensive ordinary meters, and those with TOU rates allow the utility to load shift and rate shift for the benefit of the utility and not the consumer.

At no point am I seeing the actual benefit to the rate-payer on their side of the meter. I've been through TOU metering and abusive rates during water shortages when I'm compelled by law to irrigate my lawn at 3-5 AM and then pay high rates for all the water I didn't use.

Having a real-time display for my water use would have filled an intellectual curiosity when flushing the toilet to see how much was really used (the first time), but beyond that it would not have mattered to my usage. My goal was to save my lawn and not go broke. Given the dead lawns in the area - it was very clear that lots of people had to choose between a dead lawn and food.

High TOU rates will be impossible for a large segment of the population to accomodate, which will mean yet more subsidies and rate shifting. At the end of the day - we will have invested billions to shift rates around without having actually done much else. Back to my statement about goals - we cannot expect to meet a goal without having one.

No amount of "marketing" is going to surmount the lack of a net benefit to the consumer. The ability to attach "fancy new appliances" is not a benefit - its a contortion to cook up advantages where there are none.

This is far worse than "selling icebergs to eskimos". At least the eskimos would be allowed to decline to buy the iceberg.

And in the spirit of full disclosure - I am a 30+ year veteran of the IT technolgy marketing and service world. I have no stake in the outcome of the smart grid except as a consumer. My business is devoted to measurement of MTBF which is totally independent and vendor neutral.

Gay,

I will agree most consumers do not have any desire to change their consumption habits of electricity, or of water. And you are totally correct that there must be tangible and visible benefits to consumers of smart grid before they will accept bearing the added costs to implement them.

"High TOU rates will also be impossible for a large segment of hte population to accommodate, which will mean yet more subsidies and rate shifting."

Governments and the utility industry recognize this is a distinct possibility, but they also believe that high TOU rates will change most consumers’ desires to pay far more attention to the consumption habits through a cultural change, i.e. they firmly believe higher TOU rates will force more consumers to consider the practice load shifting, practice more conservation, and invest in more efficient appliances.

Keep in mind that higher TOU rates looming in the future are largely viewed as UNAVOIDABLE by governments and utilities. This is because the existing aging grid and large central generators, especially nuclear, will need expensive refurbishments, and moreover to pay for the huge influx of more expensive renewable source generators that is underway.

Save your pennies Gay, we're going to need them.

Gay,

You say you may have been curious to know how much it cost you to flush your toilet, but beyond that it didn't matter to your consumption of water.

I wonder if you would say the same thing about the gasoline in your car in light of the skyrocketing gasoline prices lately. Fuel economy has never been very high on the list of desired features when buying cars in the past with cheap gas, but just watch how sales of guzzling SUVs and trucks will suffer if gas prices continue to rise and don't come back down. Furthermore, we will all start caring much more about how much it costs in fuel to drive to the store, or take a motor trip vacation.

The same basic consumer motives will apply to water and electricity consumption, and in choosing consumption habits, if their rates were to rise substantially higher in the future.

Gay claims that The ability to attach "fancy new appliances" is not a benefit - its a contortion to cook up advantages where there are none. Not so at all. Your opinion may vary, but I'm fairly convinced that the rates we in N America pay for electricity are quite directly related to the cost of production of the marginal unit of electricity. Electricity from large, continuously operating baseload genarating stations is a LOT cheaper that that from intermittently used low-efficiency peaking plants. The more we can keep the costly marginal peakers out of the market, the lower our costs will be.

Len is correct about the marginal cost of production of electricity that ultimately determines our costs. Most consumers don't even know what marginal cost means unfortunately, but those same consumers would very quickly learn what they mean if they were able to monitor and track and buy their electricity at advertised prices in some automated fashion in real time. Even better if the could buy their electricity from the generator source of their choice as in Len's IMEUC market system proposals.

If anyone doubts what I am saying, consider this analogy. Just observe conversations around your dinner table every time gasoline prices jump up or down a few cents. The first thing that happens is many people see the change while commuting to work, and then report them to family members at the dinner table. We may all then complain about increases but more importantly we take note of the changes one way or the other. Then we typically begin to think about deciding when and where to fill up our cars, depending in part on what level our tanks are at and what our driving needs will be in the near future.

At some price level that becomes too high to bear, we may even change our future plans to purchase a new vehicle with better fuel efficiency than the one we have depending on the difference in fuel costs.

There is no reason technology couldn't enable the same consumer approach to electricity consumption but in an automated fashion.

Buying electricity is nothing like buying gasoline. If I choose to use other transportation options, such as mass transit, or carpools, I don't have to buy gasoline at all but I still have transportation.

Regardless of rates - I, like every consumer I know, want to pay as little as possible to the power company. I do not need to watch my meter spin (literally or virtually) to tell me that setting my A/C temp higher will reduce my bills. I, and millions like me, already make that decision without TOU rates.

I agree with Len that avoiding peaking power generation is a realistic goal. (except for New England that has a surplus of base generation).

TOU rates intended to reflect the costs of peaking mean that rates change in step with changes in costs of generation. Once again - this is a utility-side benefit and not a consumer benefit. Marketing a benefit that sounds like " rates won't go up as much" is a very tall order. Its still a rate increase.

My larger concern is that TOU rates that flow with wholesale generation costs allow wholesale power companies to take less risk with generation since they will be paid regardless of the production costs. They may generate less at peak times as a result of "demand response" but the risks of the spot market have now been shifted to the consumer. Utilities as distributors then pass through their costs with their markup and have no incentive to control them.

I see a lot of opportunity for enron-scale mischief with this disconnection of investor risk.

"Buying electricity is nothing like buying gasoline. If I choose to use other transportation options, such as mass transit, or carpools, I don't have to buy gasoline at all but I still have transportation."

I disagree. If you choose to cut your grass with a push lawnmower for example, you could avoid buying electricity to power an electric mower.
There are many other examples one could cite if you wanted to debate this.

"I do not need to watch my meter spin (literally or virtually) to tell me that setting my A/C temp higher will reduce my bills. I, and millions like me, already make that decision without TOU rates."

This is not the point Gay. Of course everyone knows this. My point is increasing numbers of consumers will want to know how much they will reduce their bills by turning up their A/C thermostat, among other measures, particularly as rates increase painfully over time.

To find out how much, you either have to "watch your meter spin", or have an electronic box that watches it spin and communicates with appliances in order to measure it. The latter is far more convenient, wouldn't you agree?

You personally Gay may not be interested in knowing how much you might save on your electricity bills by changing your thermostat, and I will grant you that because we have all been so spoiled for a very long time with very cheap electrical energy, most of us have never really cared much before. But just wait until your electricity bills rise over time to become comparable say with your typical mortgage payments. I suggest then many consumers will start to care much more.

Although I will admit smart meters and TOU rates directly benefit utility companies and the grid much more than consumers, technology in combination with these could in theory enable consumers to better manage their consumption habits automatically in the name of minimizing their bills.

Hydro One, Ontario's largest local distribution utility, has studied hundreds of residential customers several years ago by equipping them with free real-time in-home energy displays that tracked their bills. The consumers in the study groups cut back on their total consumption anywhere from 0 to 20 percent, or nearly 10 percent on average. This was simply because their displayed bills were in their faces every day watching their meter spin for them. Dr. Dean Mountain of McMaster University in Hamilton Ontario published consumer behavioral research results from these studies.

Indeed consumers can and do benefit from technology that watch their meters spin Gay.

"Once again - this is a utility-side benefit and not a consumer benefit." -- This statement indicates confusion of distribution with generation+transmission. These are two entirely separate businesses, with entirely different incentives, and should in every case be split apart A proper market would have generation+transmission as sellers, all customers as purchasers, and distribution as a tightly regulated fixed-price intermediary.

It must be a joy to live in such a fairy tale world where supply and demand energy loads mate up one hundred percent so that you can support the fallacy of the smart meter so blindly. These devices are not there for the purpose you purport. They are only being installed for wide spread alpha testing under realworld conditions. The interference they cause and are susceptible to are not readily measured in labratory settings, so the public is being used as guinea pigs for that singular purpose. The very simple fact that electricity produced and not used is wasted should tell you that you are supporting a fallacy, since the power producers still have to cover costs and supply dividends to stock holders 247/365. Ecouraging non peak use cuts the profit level, reducing income. Were it otherwise you would see advertisement in all venues encouraging off peak laundry and similar useage. Several decades back power utilities tried the "Smart Switches" on water heaters, and found them to be counter productive to profit levels.

Sorry my friend but your theroy is extremely flawed and outside of the real worldat best, and a sales speech at worst.