(August 2011) Economic consultant Michael Rosenzweig challenges Constantine Gonatas’s proposal for ensuring FERC’s demand response rulemaking achieves its objectives. Also, Juliet Shavit...
Saving The Smart Grid
Hype, hysteria, and strategic planning.
the government’s mandate, we’re starting with smart meters, it’s about getting price transparency in your hands so you can help us de-stress the electricity system and improve the environment by allowing us to reduce peak demand and get off coal,’” Stevens says. “We’ve played that message out to them consistently.”
From the beginning, Hydro One’s message was clear, concise and firm: This is happening, it has to happen, here’s why, and here’s what you will be asked to do. Explaining the environmental aspect of the mandate was part of it, but Stevens adds that being clear that aging infrastructure absolutely needed to be replaced was key to establishing a sense of urgency.
Once the need for investment is established, the smart aspect is easier to justify: Infrastructure has to be replaced, so why not do it with tomorrow’s technology instead of yesterday’s? The emphasis was squarely on the role of smart meters as a vehicle to communicate cost signals—either to encourage consumers to invest themselves in a comprehensive conservation effort, or at least to understand power costs.
Historically one could boil consumers’ engagement with electric utilities down to two words: reliability and cost. Nothing about smart grid is remotely that simple or concise, so adding a third leg to customer awareness is a challenge under the best conditions. Certainly strong government backing makes things easier in Ontario than they are almost anywhere in the United States, but there’s still a lesson in the clear and consistent message the utility is sending to its customers. It’s an unflinching message of necessity, not a dance around hard questions or a promise of pie-in-the-sky returns.
“Rates are going up,” Stevens says. “The government is talking about the need of infrastructure investment, and we’re talking to customers about it. We’ve made the investment, and we’re going to give you the price transparency.”
Honing the Message
It’s worth saying again; the smart grid is already being built, and that construction will continue. Smart networks, AMI, demand response, home energy management—it’s all happening. But the effectiveness of utilities in explaining the associated complex concepts, new value propositions and, yes, higher costs to consumers will have a major effect on how long it takes and how much it costs.
“There are some elements of what different people call smart grid that are going to have bumpy times in the short term,” Causey says. “Eventually the grid will become more automated, more efficient and more right-sized for demand, but a lot of the things just aren’t going to work in the short term. You can’t do all of this stuff overnight.”
Elster’s Munday adds, “It’s a journey. You learn as you move forward. As long as you keep focused on serving the consumer, the smart grid does deliver benefits.”
That evolutionary path, however, makes it difficult for utilities to hone their smart grid message, and many utilities are learning the hard way that customer communication can be as difficult as the most demanding technical problems. In fact, talking about technical issues on a national scale is practically moot, given all