What are some approaches to regulation adopted in recent decades by national governments, and the implications for management making international investment decisions?
Summer of Discontent
Smart-grid planners feel the heat.
As America approaches summer’s Dog Days, the debate over smart meters is heating up. In an effort to understand the controversy, it’s tempting to view it as a purely political argument—albeit a complicated one. In some jurisdictions, opposition is coming from people on the left side of the political spectrum, whose main complaint stems from distrust of big corporations and the technologies they’re promoting. At the same time, right-leaning opponents seem convinced that smart meters are part of a leftist scheme to advance a radical green agenda—and in the bargain to impose big government control over individuals.
“This is all part of President Barack Obama’s cap-and-trade plan,” wrote Westerville, Ohio, realtor Petra Hinterschied, in a lengthy blog post on her city’s smart-meter project. “We must ask ourselves: Do [the] benefits outweigh the possible unintended consequences, loss of liberty, immediate and future costs of the smart grid system and huge security/privacy issues?”
But as politically motivated as some of the arguments might be, at least two themes unify virtually all public opposition to smart meters, namely:
1) People fear what they don’t understand, and a lack of information translates into a perceived threat. The human imagination fills dark corners with hideous monsters; and
2) The people who are most likely to protest and picket are the same ones who most fervently distrust governments and companies—especially when those institutions try to force changes ostensibly meant for consumers’ own good.
Combine these themes with companies’ inexpert approaches to customer engagement and an ideologically charged political environment, and you get a PR powder keg ready to explode. The upside—if there is one—is that the whole painful process is teaching utilities the delicate art of customer engagement.
As this issue went to press, utilities in at least four states were facing public backlash against smart-meter rollouts—and that’s not counting the class-action lawsuits previously filed against Oncor and Pacific Gas & Electric in Texas and Bakersfield, Calif., respectively.
For example, in Northern California, about 60 residents picketed offices of the California Public Utilities Commission in San Francisco on July 20, carrying protest signs and chanting such slogans as, “One, two, three, four, smart meters no more.” The demonstrators voiced concerns about privacy and personal choice issues, as well as the meters’ radio-frequency transmissions and their possible effect on human health. Several local governments in Northern California, including Berkeley, Marin County, Santa Cruz and San Francisco, petitioned PG&E to stop its smart-meter rollout pending further public hearings and studies. The Marin Independent Journal published an editorial on July 20 that stated, “Forcing your customers to do something without first making sure they are comfortable with it is not the best way to run a business.”
In Maryland, executives at Baltimore Gas & Electric were stunned when the Maryland Public Service Commission (PSC) decided in June to deny the company’s DOE-funded smart-grid investment plan. The decision came in the midst of a heated gubernatorial campaign, in which