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Selling the Smart Grid

Special report on public support for smart metering and demand response.

Fortnightly Magazine - April 2008

The smart-grid concept is beginning to penetrate the public consciousness.

The subject has made its way into consumer magazines, daily newspapers and CNBC’s “Street Signs” TV show. Even some presidential candidates have dared to discuss this geeky technical concept in their stump speeches and campaign platforms. Sen. Barack Obama, for example, says he will “invest in a digital smart grid … to enable a tremendous increase in renewable generation and accommodate modern energy requirements, such as reliability, smart metering, and distributed storage.”

Such growing awareness is a promising sign for proponents of smart-grid technology and related policies and business opportunities. But for the smart grid to deliver on its promise, utilities must gain customer support for fundamental changes in utility services—most notably dynamic pricing and demand-response capabilities.

Getting that support might prove tricky.

In late January, a public outcry forced the California Energy Commission to withdraw plans to include mandatory smart thermostats in the state’s new building codes (see “ The Backlash! ”). The episode exposed deep mistrust of governement institutions and utilities—and also illustrated the dismal state of public understanding of utility services and costs.

The good news is that new technologies and tariff policies might allow the industry to engage utility customers in an important dialogue—addressing challenges and options in a future shaped by resource scarcity and environmental constraints. By entering this dialogue with a willingness to both educate consumers and learn from their perspectives, utilities and regulators will be positioned to deliver the smart grid’s promise of efficiency, economy and reliability.

In this special report, Fortnightly’s editorial staff examines the industry’s experiences so far with gaining public support for smart metering, dynamic pricing and demand-response programs.  See “ The Backlash! , “ The Policy ,” and “ The Pitch .”