If there is a consensus within the smart grid sector, it's on the necessity of getting consumers to use new digital meters, energy displays, appliance controls and pricing innovation to reduce their use of electricity.
This has been the mantra of the GridWise Global Forum in Washington this week, a convention of utilities, smart grid vendors, consultants and regulators. Theodore Craver Jr., president and CEO of Edison International, said the task involves providing essential information to customers, "so we can get them engaged around the idea of saving energy."
Largely missing from the discussion this week has been a primary but uncomfortable question for the grid coalition: Just who will be doing business with the customer as the smart grid grows? Will it be the electric utilities that now own the franchises, or companies of all sizes that want a new path to the consumer, from startup smart device manufacturers to AT&T or Home Depot or Google or Wal-Mart?
The question lies at the center of efforts to work out technical standards for connecting smart meters, communications devices, appliances and electric vehicles to the grid, forum participants say. It figures squarely in debates over assuring privacy and cyber security on a smarter grid, and what kind of communications links will tie consumers to their utilities.
The question could affect whether the smart grid at the outset will be a universal service for all electricity customers or be segmented to groups of customers who support climate policies and enlist in the movement.
"It is the elephant in the room," said Greg Guthridge, a managing partner of Accenture.
While the issue was not confronted frontally, it was on many minds, apparently.
On one forum panel, Fiona Sim, director of the Intel Open Energy Initiative, spoke for many commercial outsiders who want in on the grid. "The consumer wants to be in control" when smart meters arrive and new programs emerge, she said. That means consumers control their energy usage data, control the gateway to those data and decide how they will be used. "I'm not sure that is where we have started" in the first smart grid rollouts by utilities, Sim said.
Utilities not well-positioned
Guthridge said Accenture's research shows that utilities by and large are not well-positioned to offer new smart grid services to their customers. "The average customer speaks to the utility six to nine minutes a year," he said, and most of those conversations are negative, about the lights going out or a bill issue.
The utilities' primary mission, occupying so much engineering and systems effort, is to make sure customers get as much electricity as they want, when they want it. "The customer takes that for granted," said Guthridge.
In Accenture's view, the smart grid will have to be marketed to people most likely to want it, at least at first, until its benefits are indisputably clear. Utilities don't segment their customers that way. Their mission for more than a century is to provide uniform and universal service to all. "Consumer analysis, product design, channel management, that's not what utilities do," he says.
A vote of confidence for the utilities came from Alex Laskey, president and founder of grid software provider OPOWER. He said his firm's clients in the utility sector are achieving savings of 2 to 3 percent in peak power usage by sharing information on households' energy consumption. OPOWER analysis can combine detailed data about a household's electricity usage with information about the age, size and construction of the home to suggest how the consumer can save more, he said.
"We work with several utilities that are doing a fantastic job," he said, naming American Electric Power in Ohio, Commonwealth Edison in Illinois, and National Grid in several states. Both AEP and Commonwealth Edison are running pilot projects with 135,000 customers each. "The results speak for themselves. We are seeing sustained, growing energy savings," he said, averaging $40 to $50 per year for an average household.
Craver's Southern California Edison utility is installing 5 million smart meters throughout its system as part of a 20-year transition to a smart grid network. But he emphasized the long-range scope of the challenge.
Much at risk, much more to be invested
U.S. electric power companies have a $1 trillion investment in existing power plants, control facilities and transmission and distribution lines. Meeting carbon reduction targets could require $1 trillion in new investment. If a large part of that new spending is for technologies that become obsolete in five years instead of 40 -- the minimum lifespan for many current grid components -- then utilities and their customers will feel that impact, he said.
And smart grid development must include all customers, he said, "not be elitists."
The issues of smart grid privacy and security enter into the debate, too. Paul Camuti, president of smart grid applications for Siemens Energy Inc., predicts numerous linkages that will handle smart grid data to offer choices to consumers and operational benefits for utilities.
"There's no reason not to make all these connections," he said in one panel session. Assuring online privacy and security are mandates now in the banking and health care industries. "I don't think the answer is not sharing the data," he said. It's ensuring the privacy and security of information flows.
But Todd Keil, the Department of Homeland Security's assistant secretary for infrastructure protection, struck a more cautious tone about opening up grid transactions for commercial purposes, emphasizing concerns over cyber threats to grid security. "There are risks in data sharing. It is something that has to be looked at very closely," he said.
Convincing consumers to invest in a marginal issue
"It has to be very very narrowly defined -- which data are you going to share, and is there a good reason for it," Keil said.
There are three ways for utilities to go, Guthridge said.
They can acknowledge they are not consumer organizations. They can focus on their historic mission of managing the electricity infrastructure and getting power to the meter. Let the customer choose a non-utility company to manage smart grid applications.
Or utilities could become a "trusted portal," endorsing particular vendors that would compete to provide smart grid services within the utilities' franchises.
Or, Guthridge continued, the utility could morph into a complete smart grid service provider, supplying digital meters and home energy displays, leasing solar panels, and owning electric vehicle charging stations. "If a utility has a good brand name, it could work," he said.
No one can say yet which model will turn out to be the dominant one, he said.
But whatever the path, the challenge of getting widespread consumer buy-in for the smart grid is an uphill climb, he and others said. The time may come when climate concerns become so visible and threatening, or energy so expensive, that Americans embrace conservation and efficiency wholeheartedly.
But today, most American households don't pay enough on their electricity bills to care about marginal savings from smart grid programs, Guthridge contends. "If this is just about installing smart meters, and you save $3 month, this is going to fall flat."