The utility’s role is changing, and regulation must change along with it – to spur innovation and respond to evolving customer needs. Modernizing the industry will require a dynamic approach.
A land rush in the burgeoning home energy management market.
real usage information and not estimated, eMeter hopes its approach will allow the Prius Effect to really kick in. In other words, customers will see how their usage affects cost over an actual billing cycle, and will adjust their behavior to meet a budget.
To what degree customers will actively change their consumption patterns remains unclear, but early experiences suggest many at least are interested in understanding their usage better—and social networking Web sites have changed their expectations about what’s possible. “We’ve had quite a few of our customers ask about doing comparative usage—between people in their area or service territory,” says Michele Delka, AMI director at Westar, a Kansas utility that has collaborated with eMeter on the product’s development. “People don’t think outside what they believe to be available. Two years ago they never thought they would be asking for comparative usage.”
Energy Engage might be among the most advanced products currently in the market, but there’s a rub. Because it’s completely tethered to utilities, it can’t go viral. Its prospective advantage in information delivery is limited by its client base, and utilities—not consumers—are eMeter’s clients. Unless Energy Engage becomes an industry standard for utility websites, it never will be energy’s Facebook.
In this sense, eMeter is up against the same fundamental conundrum as every player in the home energy management market—the conundrum of market design.
“To realize the full potential of the smart grid, you have to involve the consumer,” Klepper says. “Peak demand reduction, new pricing programs and better customer satisfaction do require some involvement on the consumer side. Generally utilities don’t have capabilities to build these new consumer-facing services that can take advantage of the smart grid.”
And even if utilities gained such capabilities, they might lack the motivation to pursue opportunities in the market for home energy management.
When it comes to realizing the market potential of technologies, consumers drive change. But except in deregulated markets like Texas, which have decoupled retail services from T&D, a lack of customer choice negates the consumer’s power to drive technological change.
“This is kind of a good-news, bad-news thing,” Kiesling says. “Getting the technology out there is the camel’s nose under the tent for a more vibrant, rich, rivalrous retail market where consumers can buy more interesting products and services around electricity. In the short run at least, utilities will have more of a lock on the retail market than is beneficial for consumers.”
But that’s just the short term. In the long run, the real key that unlocks the potential of home energy management might come from outside the utility industry or the consumer’s home. Specifically, it might come from the consumer’s garage.
“The plug in electric vehicle (PEV) has the potential to be our killer app, to be our cell phone,” Kiesling says.
By its very nature, the PEV turns the consumer into a vendor. Once the end-user has power to sell as well as buy electricity, the Prius Effect could gain new meaning for utilities, and the legacy market design could be turned on its