Here’s a recap of Smart Grid Rule #5:  You know you have a Smart Grid when your utility offers you a fair, market-based price for any electricity you agree to sell to them.

Rule #6 focuses on a new Smart Grid category.  The traditional grid comprises three categories:  Generation, Transmission, and Distribution.  Once electricity is distributed to the end user, it is simply measured from one timeframe to another for purposes of billing.  The Smart Grid adds a fourth category – Consumption – to complete the electricity supply chain and denote the basic changes to our relationship with electricity.  

Ask yourself this – do you leave your home with water taps running?  Do you leave your car idling all night in your garage?  The answer is hopefully a resounding no – who would think of wasting water or gas like that.  But do you leave lights on 24 hours a day, or leave your charging devices plugged in even when they are not needed for charging purposes.  Unless you are in a tiny minority of conscientious consumers, the answer is yes – you do.  Why is electricity different from water or gas?  We’ve been conditioned to think of it as cheap, abundant, and always there (with some memorable exceptions).  Most consumers are blissfully ignorant of their electricity use. 

That blissful way of thinking is over.  Most of the US electricity supply comes from fossil fuels, which will get more expensive over time as carbon emission costs are reflected into higher electricity rates.  We are closing the gap between supply and demand so that we will not be able to meet peak demands (such as the hottest days in a summer) with current generating capacity.  Can you cope with brownouts?

Our consumption of electricity will dramatically change with the Smart Grid.  Home Energy Management Systems (HEMS) and more sophisticated Demand Response programs from utilities or power aggregators will give consumers opportunities to manage our use (and even generation) of electricity.  Similar software solutions exist for Commercial and Industrial customers and will be discussed in a future blog.

Think of how the telecommunications industry changed in the past 25 years.  From the ubiquitous, hard-wired black sets of yesterday to the dizzying array of mobile communication devices today, we have seen enormous changes in the companies that deliver dial tone or connectivity and the ways we choose to use it.  Electricity is that much and more – it is telecom all over, but with more complexity. 

That complexity calls for HEMS solutions to help consumers manage their use and production of electricity.  Today’s nascent HEMS solutions for residential homeowners are starting to build awareness of energy use.  Simple awareness can often produce consumption reductions of up to 15% per household.  Such granular reductions added on an incremental scale means that additional power plants don’t have to be built to accommodate peak demand. 

HEMS solutions will give consumers the ability to reduce our electricity bills.  You will have discretionary-use appliances (dishwashers, ice makers, washers, dryers) that can be scheduled to take advantage of the cheapest electricity available for purchase.  You will create rules to completely power down discretionary-use consumer electronics at times when no one is or should be using them.  (Parents – consider those implications.)  You can identify the electric devices that are “critical” to your home’s operations like furnaces and refrigerators that should always have electricity available to them.  Current HEMS solutions make several In Home Display (IHD) options available to end users that run the gamut from smart phones, wall-mounted displays, internet-enabled TVs and home computers.  This is an intelligent hedging of bets that acknowledges the distinctions between generations with regards to comfort and familiarity with different IHD devices.  One generation may prefer to tap and scroll their way through set up and then monitor energy usage on a more or less continuous basis.  Another generation may prefer to set up rules by computer keyboard and see a weekly report on energy usage.   Another generation may simply seek a service provider that gives them a simple box to check that provides a “bundled” service option for electricity management. 

No matter how it is managed, Consumption gets a new focus with the Smart Grid, and there will be new solutions and solution providers to help residential consumers their use of electricity.   

Smart Grid Rule #6:  You know you have a Smart Grid when you can choose from several proven HEMS solutions and IHD options to manage your residential electricity consumption.