(August 2011) Economic consultant Michael Rosenzweig challenges Constantine Gonatas’s proposal for ensuring FERC’s demand response rulemaking achieves its objectives. Also, Juliet Shavit...
Selling the Smart Grid - The Pitch
Two utilities win customer support for dynamic pricing and demand response.
approve the program by mid-year.
On the other side of the country, Southern California Edison is proceeding directly to the smart-meter rollout. In 2009, SCE plans to install some 5.2 million smart meters throughout its service territory. However, to get the program off the ground, the utility had some serious public relations challenges to overcome.
“In 2003 and 2004 we were viewed by the California Public Utilities Commission as a company that was not supportive of advanced metering systems,” says Paul De Martini, director, Edison SmartConnect. “We were criticized loudly for that. But in our mind, the technology didn’t support a positive business case, both for us or for our customers.”
As a result, SCE implemented a two-pronged approach. First, it began working with nine advanced metering vendors in 2005 to develop a device based on open design standards (rather than a design standard of a single supplier) that would make it compatible with the next generation of smart thermostats and other home appliances.
At the same time, SCE began assembling a marketing campaign for what would become Edison SmartConnect, a pilot program designed to let customers manage their energy use and save money through new, time-differentiated rates and demand response technologies.
The meters—which will be supplied by at least two vendors—will be able to “talk” through home area networks, providing customers with the near real-time energy use and cost information they will need to conserve energy. The system will allow customers with communicating, smart thermostats (and other appliances) to automatically respond during critical peak pricing and grid reliability events.
Information from the meter into the home will arrive via a two-way wireless interface that will allow customers to immediately see how their actions affect usage. Time-of-use rates will be available in 2009 after the new meters are installed and tested. Customers who elect to participate and move consumption away from afternoon hours should save money.
Marketing campaigns have thus far focused on potential benefits to customers and the utility. For example, the system will make remote service activations possible, enabling the approximately 1 million SCE customers who relocate each year to activate service on demand, rather than scheduling a visit by a service representative. In the future, it will support widespread adoption of solar installations, plug-in hybrid vehicles, energy storage and other clean technologies that will drive greater environmental benefits.
“At the outset, we wanted the message to be that we were going to introduce a new metering program that would benefit our customers,” De Martini says. “People focus on what the utility gets out of it, but we wanted to demonstrate that there’s a lot more to be gained by the customer. These smart meters will improve service and prevent outages. A program like this has to make sense for the customer.”
In focus groups, customers chose the SmartConnect name because it suggested they were the smart ones. “Today’s customers want choices,” DeMartini says. “They want to be in control, and you have to keep options simple.”
In 2009, customers receiving the new meters will receive a follow-up