A few weeks ago I had the opportunity to discuss, well, no, that’s the wrong verb to describe the scenario.  I had the chance to bow on bended knee to humbly suggest to a representative of my local utility that it could improve its messaging about the benefits of smart meters and Smart Grid technologies in general, and target messaging to women in particular.  The response, delivered in the chilliest of tones was that since the utility had a woman at the head of the marketing effort, that demographic was more than amply covered.  No, sorry, it’s not covered.  Not even close.       

It is employee attitudes like this that will kill Smart Grid support, which is needed at both the taxpayer and ratepayer levels.  It is employee attitudes like this that have utility CEOs despairing of successfully effecting change within their own organizations*.   It is attitudes like this that torpedo any possibility of a utility being the trusted advisor to help consumers manage significant changes in their relationships with energy.  And the saddest realization of all is that while consumers overwhelmingly expect utilities to offer advice about energy consumption, utilities like the major IOU (Investor Owned Utility) in my area are serving up plenty of material for future business school courses about how to squander trust in utilities through a lack of interest in ratepayer communications.    

There are smart utilities out there that have successfully enlightened their customers about smart meters and Smart Grid benefits, and it would be fantastic if all utilities actively shared successes and failures to facilitate the development of practical advice.  The smart utilities understand that today’s ratepayer relationship may migrate to a customer relationship in the future, and that customers will have choices about energy suppliers.  These same utilities also understand that sustaining and growing trust relationships will help engage consumers to be enthusiastic participants in residential demand response programs and energy efficiency programs. 

So when you read the definition of the Smart Grid in the Smart Grid Dictionary, the point about bi-directional communications is more than an evolutionary change in a network, for some utilities, it’s a revolutionary change in their behaviors.  You may not always like what you hear from your ratepayers, but start listening now and building rapport to deliver the complex messages about the Smart Grid and the benefits to consumers.  And Smart Grid solution vendors need to remember that the Smart Grid is more than just wealth creation for them.  It won’t happen without value creation for consumers. 

To all the hard-working, dedicated, and insightful PG&E employees who understand the importance of enlightening consumers about Smart Grid initiatives and are working to do that, thank you from the bottom of my heart.  I support your efforts, and I am sorry that you have to deal with colleagues who just don’t get the fact that Smart Grid success is contingent on ratepayer and taxpayer support.  Maybe if you post “It’s the Consumer, Stupid” signs in the office, the message will sink in. 

*IBM global study of utility CEOs:  70% anticipated turbulent change within their organizations about Smart Grid, and from one year to the next reported a 19% drop in their expected success in managing that change.

What does this have to do with smart meters?  Everything.  NBC didn’t just broadcast the Olympics, they promoted the schedule of events to build interest and excitement about these games.   Newspapers and web sites also identified the dates and times and provided those “human interest” angles in stories.  If I had to work to get the information about the dates and times the US/Canada games were playing, well, I probably would have missed two great games.  But NBC knew that to get its’ message to the widest possible audience, it had to repeat the game schedule (multiple times), tell me where to find more information (multiple times), and continue to advertise the game right up to the moment the puck hit the ice.

Those of us in the Smart Grid business spend a considerable amount of time thinking, talking, and prognosticating about utilities, new technologies, the changing relationship that consumers will have with electricity.  We understand the benefits, the motivators, and the complex, phased deployments of smart meters.  However, the vast majority of the American population doesn’t know, and doesn’t care about anything to do with the Smart Grid.  There are too many other things going on in their lives to pay attention to it. 

Their attention will shift to smart meters only when they get that utility bill insert or letter that tells them they are going to get one soon.  At that point in time, utilities have the opportunity to really educate their residential ratepayers about the benefits that smart meters will deliver.  Some utilities deliver a reasonable amount of education even before this interaction opportunity.  However, many do not, to the collective detriment of future Smart Grid rollouts. 

Now imagine if utilities acted more like NBC competing for consumer attention.  The messages have to be repeated multiple times using different communication channels and social media to get to the demographic groups that are least likely to pay attention to Smart Grid topics.  To educate ratepayers about smart meters, rather than just sending a billing insert, they would reach out to communities and deliver educational talks about smart meters and their ties to energy efficiency and conservation.   Utilities would create tools that offer interactive discussion of smart meters, the new information that consumers can obtain from them, and some examples of how other ratepayers have learned to manage their energy usage to lower their bills.  Add a plan to educate utility resources that interact with the public, and you have the start of a Consumer Enlightenment Model in action. 

Utilities need to understand that the mission to keep the lights on is not enough these days.  The safety and reliability mission must also include education about the consumer benefits of smart meters and other Smart Grid technologies.   The focus on the consumer is a real game-changer, and it is critical to the success of Smart Grid rollouts.

The Metering, Billing/MDM America conference begins next week in San Diego.  The latest technologies will be here, but I’ll be seeking interesting discussions about how utilities and their vendors will communicate the value of smart meters to consumers.

Microgrids within a utility’s grid can collectively deliver utility-scale distributed generation by selling excess energy to utilities.  However, microgrids can also supply what I call “virtual” generation by disconnecting from the utility grid and functioning as energy islands during peak usage times.  This is an extreme form of a Demand Response Program, but it can be done at a scale that eliminates the need for future utility investment in generation assets.  It is quite a shift for utilities to no longer build to peak electricity needs – but the Smart Grid and microgrids in particular – can help utilities evolve planning functions to asset optimization.  And since many microgrids incorporate renewable generation and storage, they are a great way for utilities to add distributed renewable generation and storage management into their asset investment plans.     

I was at the National Electricity Forum last week and asked the panelists discussing a new electricity infrastructure about the assumptions they were making to include distributed generation and microgrids into their plans.  The bad news is that they really aren’t making plans for distributed generation.  They are making plans that assume that all new generation is remote from users, and requires investment in transmission facilities, including new lines and new routes.  That may happen, but it won’t happen quickly, and only at great political and capital costs.  There’s a fast track for the Smart Grid, and it is based on wide scale distributed generation and microgrids.  Distributed generation and microgrids can happen much faster than many other benefits of Smart Grid solutions, and lead the way for an energy ecosystem in which there are many more winners and fewer losers.

To learn more about microgrids, join me at the Sustainable Silicon Valley/Santa Clara University Smart Microgrid event on February 23.  You’ll hear about this university’s project to upgrade their existing microgrid to a smart microgrid and enjoy thought-provoking discussion from a great panel of industry leaders – I’m looking forward to being the moderator.

Mark your calendars for the Metering, Billing/MDM America conference in San Diego on March 7-10.  This is a great show to learn about metering of electricity, gas and water, and the latest technologies to make dumb meters into smart meters.

Business and academic campuses are excellent candidates for microgrid installations, and many already fulfill some capabilities in the definition above.  Microgrids can serve as living laboratories for the proliferation of technologies ranging from generation (especially renewables), transmission, distribution, building energy management, and data center energy efficiency.  Beyond the technologies, microgrids provide perfect settings for different communications strategies and outreach programs to encourage smart energy behaviors.  College campuses also have the added benefits of aligning microgrid projects with academic departments ranging from electrical, mechanical, chemical, and civil engineering to information and communications technologies (ICT) and public policy, economics, and behavioral science disciplines.  Just imagine the opportunities that exist at these intersections of need and innovation.

Here are three areas where I’d like to see academic campuses get involved:

1.  Data center efficiencies.  Cloud computing, the continued adoption of the Internet and new social media applications mean that more data centers will be built going forward, and they can’t be the energy hogs they are now.  Can new data center designs take advantage of the waste heat instead of expending energy to cool it or exhaust it out of the buildings?  Can new technologies make it useful heat instead of waste in both new and legacy data centers?

2.  Regulatory incentives for microgrid interconnection to utility grids.  The majority of states today do not make it easy to tie microgrids into the utility grids.  Standby charges are also disincentives, forcing microgrid operators to purchase standby power from utilities in case the microgrid generation shuts down.  What are the better models to encourage microgrid development while ensuring the overall reliability of power delivery for all utility grid customers?  What legislative, regulatory and tax policies work best to accelerate development of microgrids? 

3.  Social media applications.  The potential of social media to educate and influence human behavior regarding energy awareness and consumption is largely unexplored.  Students are natural adopters of social media, and are a great research population for companies interested in measuring the impacts of these applications into overall energy efficiency and energy management programs.  How can social media be used to reduce greenhouse gas emissions?  What programs will appeal to the broadest range of microgrid energy consumers?

To learn more about microgrids, join me at the Sustainable Silicon Valley/Santa Clara University Smart Microgrid event on February 23 to hear about this university’s project to upgrade their existing microgrid to a smart microgrid.

If your interests are focused on electric meters, the Metering, Billing/MDM America show in San Diego on March 7-10 has a conference agenda that delivers valuable information on the latest advances in meters and more.  This annual event draws innovating utilities, meter manufacturers, and thought leaders to discuss not only theory but reality in Smart Grid deployments.   

Could the new personal energy consumption data that will be available through new Smart Grid technologies and services have the potential for malicious as well as beneficial use?  The answer is yes.  Leaving aside all discussion of security, here are my answers to the questions posed last week to help you understand the need for strong privacy protections of our personal energy consumption data:    

1. Who “owns” my personal energy consumption data?  Me.  I own it, and I give permission to service providers to have access to it.  Of course, the entity that delivers electricity must have certain data to bill customers for the total amount of energy consumed, just as electric utilities have that stewardship of that information today.
2. What rules govern its availability, storage, and disposal?  This is a murky area.  There are few policies in place today about managing access, storage, and disposal of personal energy consumption data.  There are state and federal laws about personal information, but these are typically focused on data that does not include energy use.  Therefore, we need to ensure that laws address personal energy consumption data and clearly identify ownership and authorization rights. 
3. Who makes these rules and how are they enforced?  It would be nice to have a comprehensive federal law that governs personal energy consumption data, so that state regulators, municipalities and co-ops could develop regulations that align to it.
4. What are potential commercial uses of my personal energy consumption data?  Here are a few hypothetical situations, with two caveats.  First, these examples deliberately exclude Home Energy Management Systems, which can take this data and save us money and reduce our carbon footprints.  Second, these are purely hypothetical musings.  Much like information is collected to form your credit score, in the future third party entities might collect personal energy consumption information to form a carbon footprint score or an energy score.  This information might be purchased by potential employers or landlords to determine if you will be an energy guzzler in their operations or properties.  Market research firms might analyze personal energy consumption data and extrapolate lifestyle information so they can target ads and promotions to you.  Insurance companies might develop new calculations that tie energy consumption to health or longevity. 

This may all be possible, but it should only occur with our explicit consent for our data to be used by these third parties.  If they can make a compelling case of the benefits that accrue to us for this commercial use of our data, I’ll listen.  

To learn more about information that smart meters can deliver, join me at the Metering, Billing/MDM America conference in San Diego on March 7-10.  This annual event draws innovating utilities, meter manufacturers, and thought leaders to discuss not only theory but reality in Smart Grid deployments.

For my Silicon Valley readers, don’t miss the Sustainable Silicon Valley/Santa Clara University Smart Microgrid event on February 23 to hear about this local university’s plans to take their microgrid and make it a smart microgrid.

Shout Out

If you are interested in a green career, there’s a new book, Green Careers for Dummies, by Carol McClelland, PhD that delivers an excellent education for readers into a wide range of job possibilities and how to position their education, skills, and interests into fulfilling careers – including Smart Grid careers.  I particularly liked how careers are divided into categories such as Careers in Rebuilding the Infrastructure and Providing Green Products and Services.  These categories help readers target their interests and clearly describe dynamic new career areas like the Smart Grid as well as identify example job positions and important industry and market trends.  I highly recommend it. 

Smart Grid technologies give us the detailed information to modify home operations for the benefits of reduced energy bills, reduced carbon emissions, and improved energy security.  Existing meters retrofitted with readers or smart meters deliver the granularity we currently lack about our use of anything that draws electricity.  Home Energy Management Systems (HEMS) offer portals to conveniently monitor and manage energy consumption using this detailed information.   Saving money on my utility bill, saving the environment, and building energy security – what’s not to like about these compelling benefits?

There’s only one downside – there’s an amazing amount of lifestyle information that can be extrapolated with granular energy consumption data from any residence.  In the traditional electricity grid, we have always been data producers and utilities have always been the data consumers – gathering kilowatthour (KWh) data so it can charge us for our electricity use.  The Smart Grid delivers a richer data set and the potential for new commercial uses of personal energy consumption data.   The pool of data consumers of our personal energy information may grow well beyond the traditional utilities, and we as the data producers need to consider these questions:

1. Who “owns” my personal energy consumption data? 
2. What rules govern its availability, storage, and disposal? 
3. Who makes these rules and how are they enforced? 
4. What are potential commercial uses of my personal energy consumption data? 

The rules about privacy of this new data need to be developed so that we as the data producers ensure smart management of its consumption.  Fortunately, there is work underway to create data privacy recommendations as part of the National Institute of Standards (NIST) Smart Grid Cyber Security Strategy and Requirements initiative.  Next week’s blog will discuss some possible answers to the questions listed here.

Shout Out

Congratulations to the state of California’s Building Standards Commission, which adopted CALGreen, a mandatory green building standards code which takes effect on January 1, 2011.  CALGreen requires inspections of energy systems in non-residential buildings over 10K sq ft, 20% reductions in water consumption, 50% diversion of construction waste from landfills, and use of materials that reduce indoor pollution.   The CALGreen program is a first for the USA, and let’s see if other states adopt similar measures, and go one better by mandating the same measures for residential buildings.  Go here for more information. 

Customer service orientation.  When was the last time your utility asked you to complete a customer survey rating their service?  There was a time when telecommunications companies didn’t forge much of a relationship with customers, but competition has changed that situation.  There is nothing that prevents utilities from developing more outreach to ratepayers to obtain feedback.  Telecom companies learned to do it through advisory boards, customer satisfaction metrics, and communication plans that deliver news in multitude of channels to effectively push information.  Today’s ratepayer may be tomorrow’s customer with a selection of vendors who buy and sell electricity.  Smart utilities should develop Consumer Enlightenment Models now in anticipation of a future with more retail choices.   

Mobility.  Once upon a time, phones were tethered to physical locations. Today, phones roam around, and telecom companies produce billing records that identify date, time, place, and length of calls as well as text messages, internet use, and manage price schedules based on time, geography, and other factors.  The advent of electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) mean that electric meters will be roaming around in large numbers.  Utilities can take a few lessons from telecom companies about billing systems that track roaming charges and required changes to internal operations to support mobile meters. 

Technology adoption at the network edge.   The telecom industry and the electric utility industry share a common and ingrained fear – the fear of unproven technologies.  There’s a sound basis for this fear – given the vital services provided by electric utilities and the phone companies, it would be unthinkable to introduce a new product or application that could bring down a network delivering either electricity or dial tone.  It would also be a career-killer.  Therefore, any new technology undergoes rigorous testing in internal labs, and this testing is duplicated in each utility because each utility network is unique.  This testing process means that technologies are adopted at a slower pace than is commonly seen in some industries, and discourages innovation. 

The “edge” of today’s electrical grid is where the meter hangs on the wall.  The Smart Grid pushes the edge into residences and businesses, and this is the area of great innovation potential.  Smart meters, whether new or retrofitted electromechanicals, are similar to smart phones – there are many applications that can be enabled by them.  This means opportunities to identify external test labs and develop certification programs that do not endorse any edge products but do provide assurances that they won’t “break” the network either.   Utilities should study how the mobile telecom carriers accommodate innovations at the edge of their networks – smart phone applications – and take some notes about setting up simulation programs and testing environments. 

There are other similarities between telecom and electric utilities as well, but these listed here, plus the deeply embedded sense of mission and monopoly skills noted in last week’s blog make the case that forward-thinking utilities should learn from history instead of re-living it.

Exceptional Mission.  Employees in the land-line phone company had an obligation to deliver dial tone – even when the lights went out, and they had their own banks of batteries for back-up power so people could call to report electricity outages.  Failure was not an option.  And telecom resources were ignored and taken for granted– until you picked up a phone and didn’t have dial tone.  This same sense of mission is expressed by utility resources too – no one thinks about electricity until an outage, and electric utilities have an obligation to deliver power regardless of circumstances.  Utility resources have done an excellent job managing today’s electrical grid.   I sometimes see and hear bewilderment, frustration, and defensiveness in utility resources when talking about the traditional grid and the changes the Smart Grid will bring.  Lesson #1 – Change is not a criticism of past performance.  Be excited that electricity is something that will no longer be taken for granted.     

Monopoly Skills.  In 1980 you had no choice for local phone service except Ma Bell.  Phone company practices, policies, and processes were heavily influenced by state Public Utility Commissions and the Federal Communications Commission (FCC).  The price of monopoly is regulation, and utilities are very good at interacting with regulators.  Another price of monopoly is the lack of utility skills in working in any other type of market.  Phone company resources had a steep learning curve to build knowledge about how to effectively communicate with customers and how to successfully introduce and manage a growing deluge of new technologies and services to customers while satisfying regulatory requirements.  It will be a painful climb for some utilities, but it can be accomplished faster and at less cost to ratepayers by learning from telecom industry experiences.  Lesson #2 – Hire outside talent to build corporate readiness for a transitioning marketplace.  Develop and deploy corporate-wide change management plans that address concerns of existing employees.

I’ll continue my observations about similarities next week after attending the ITExpo East Smart Grid Summit.

Let’s give a standing ovation to the Department of Energy.   The DOE’s new energy efficiency enforcement is producing positive results.  The DOE entered into a Consent Decree with Haier America, about a parts defect that caused certain freezers to consume more energy than reported to consumers.  The Consent Decree obligates Haier to notify affected consumers, repair defective units, add one year to warranties, and contribute $150,000 to the U.S. Treasury.  The manufacturer cooperated with the DOE investigation, and I hope that other manufacturers will do likewise, just like I hope that the Consumer Electronics Association (CEA) takes some notes in case it contemplates fighting California Energy Commission energy efficiency standards again.  

The DOE had a huge response to its call for efficiency certification documentation – 600,000 residential appliances in 15 different product categories from 160 manufacturers submitted their data so far. The DOE will review compliance with minimum energy efficiency standards, and those products found lacking will be required to deliver the energy and cost savings required by law. 

And then there are the acronyms, designed to increase inscrutability not only between the various Smart Grid domains, but sometimes also within them.   For instance, there are at least two meanings for CSP.  If I’m in the Service Provider domain, CSP means a Curtailment Service Provider.  If I’m in renewables, CSP means Concentrating Solar Power.  Ditto for OASIS.  Anyone from an ecommerce background would understand that acronym to mean an organization focused on creating ecommerce and web standards.  Others familiar with power markets would immediately think of an Internet-based tool that shares transmission price information. 

The convergence of emerging technologies and existing domains means that it is important to develop a Common Information Model to deliver an industry-accepted inventory of terms and definitions.  This ensures that a knowledge foundation is accessible to everyone to encourage rapid adoption of solutions and acceleration of innovations.  A Common Information Model needs to reflect the Smart Grid perspective for each definition and be vendor-agnostic as well as technology-agnostic.  The Smart Grid Dictionary addresses these needs, not only for industry veterans but also for people interested in learning more about the Smart Grid.  This is especially important in fostering innovations that will come, as they always do in Silicon Valley, from new approaches to existing problems.  Just imagine how Google is going to shake up the energy business through its Google Energy subsidiary.  

A  Smart Grid Dictionary reader had this to say:  “Coming from server and microprocessor chip design backgrounds, I never heard of terms like AMI and Demand Response. The Smart Grid Dictionary has been a one-stop shop for me to get crucial help when climbing up the steep learning curve – and I’m still climbing this learning curve with the help of Smart Grid Dictionary now. I’ll be one of the loyal readers of the Smart Grid Dictionary for the foreseeable future. It suffices to say that the Smart Grid Dictionary has become one of the most important resources I could not live without. Thank you very much for making such a valuable resource available.”    

I can’t wait to see how this reader applies his skills and knowledge in the Smart Grid – and I know it will be an invaluable contribution that couldn’t have happened without his fresh approach to solving issues. 

I’ll be at the first Smart Grid Summit that ITExpo East is sponsoring next week to present and moderate a few sessions.  I hope to see you there, or at the upcoming Grid ComForum in early February!

And why should they?  It’s the responsibility of utilities, and maybe the Department of Energy (DOE) as well to educate consumers better about what Smart Grid technologies can do today and in the future.  The DOE has developed a series of booklets that explain the benefits of the Smart Grid to various groups, including consumers, but clearly there need to be much more aggressive and coordinated campaigns to enlighten consumers.

Does Joe Ratepayer understand that smart meters enrolled in utility programs will reduce or eliminate the need to build more power plants to address peak electricity load requirements?  Does Jane Ratepayer understand that new power plant construction translates into higher electricity bills to recover costs?   Could Joe or Jane intuitively understand how a smart meter saves them money and saves the environment too?    

Those of us in the business understand that smart meters will save consumers money on their utility bills as the grid evolves to residential Time of Use (TOU) electricity rates and Home Energy Management Systems (HEMS) are deployed.  (Note:  The Smart Grid Dictionary defines TOU as “A rate structure with different unit prices for electricity use in a 24-hour timeframe, generally to encourage use during periods of lower demand.  This price applies to a time-of-use price, rate, or tariff and is a dynamic price scheme typically used with non-dispatchable demand response programs.  It is also known as time-of-day pricing.”) 

Analogies can help explain the Smart Grid rollout process and the role that smart meters play.  For instance, let’s say that I am building a new house with the kitchen of my dreams.  I won’t get the benefits of that kitchen’s output until foundations to fixtures are installed. 

The smart meter is like my house’s foundation.  There’s no home without a foundation.  There’s no Smart Grid without smart meters.  In building my new home, I understand that there is a start and a finish to the project.  I have a blueprint to visualize the goal.  I have a project plan to understand the process of achieving that goal.

It is vital for utilities to connect the dots between current smart meter rollout activities and long term Smart Grid objectives.   Ratepayers and consumer advocacy groups need equivalent blueprints and project plans to understand the long-term objectives in terms of what it means to their bills and the environment.   Outreach via a Consumer Enlightenment Model is absolutely necessary to build and sustain public support of Smart Grid initiatives.        

I’ll be attending the ITExpo’s Smart Grid Summit and the Grid ComForum conference to explore these concerns – see you there!