No one said it was going to be easy

The smart grid is fast becoming a reality. The U.S. power grid is aging and is in need of an upgrade. Smart meters are being installed on residences across the U.S. as part of Advanced Metering Infrastructure (AMI) deployments. Pilot programs testing a variety of residential energy management programs are well underway, including the latest from CPS Energy in San Antonio, TX. As part of the pilot program, 40,000 residential customers will receive smart meters. Over the next 10 years, more changes and developments will take place on the grid than they have over the last 100 years. However, it is not going to be easy.

The smart grid has benefits for all involved; however, failure to convey the benefits has become a major challenge. Utilities like the idea of cutting labor costs and being able to manage electricity usage more efficiently; environmentalists want to integrate renewables onto the grid; manufacturers want to sell appliances and consumers want to cut expenditures on electricity. These are all different goals and not necessarily compatible in every respect. For instance, some utilities are developing the capability to shed load by remotely adjusting consumers’ thermostats or appliances. This helps them avoid paying premium prices for power during times of peak usage, but not all consumers want to participate in these programs. Parks Associates 2010 Residential Energy Management Survey shows that about a third of households don’t mind utilities controlling systems in their homes; on the other hand, 40% of households don’t like the idea.

Another hurdle is lack of communication. Utilities are accustomed to acting unilaterally once public utility commissions approve a program. Many didn’t place a priority on customer education. This has changed significantly and utilities are taking an active role in building stronger relations with their customers. Both California-based Pacific Gas & Electric (PG&E) and Dallas- based Oncor have established C-level positions, Chief Customer Officer (CCO), to build stronger relationships with the customers. The CCOs and their staff are responsible for addressing customer concerns answering billing inquires and educating customers about the benefits of smart meters and more.

Not being easy doesn’t mean impossible. Meter data management firm eMeter’s Chief Regulatory Officer, Chris King, briefed congress in July, 2010, on the results of the PowerCentsDC smart grid pilot program in Washington, DC. Conducted in collaboration with DC utility PEPCO, King reported that the overall results of the pilot were very positive, “Over the course of the pilot, 90 percent of customers saved money -- an average of $44 per year -- and more than 90 percent said they would recommend the program to friends and family.”

Parks Associates’ 2^nd Annual Smart Energy Summit in Austin, TX on January 24th-26^th, 2011 will provide utilities and other interested parties a forum to share and discuss these initiatives as well as other lessons learned with an eye to identifying additional ways to engage in energy conservation and management programs.