I Want To Be A Prosumer

Alvin Toffler coined the term “prosumer” to describe a situation where a producer of electricity may also have a consumer relationship with a utility, aggregator, and other energy provider.

That’s exactly what is happening today.  Consumers can play the role of renewable electricity producers at individual or community levels.  For instance, in California, Community Choice Aggregation offers neighborhoods and municipalities opportunities to join forces to source renewable energy for their electricity needs.  This sensible policy encourages growth of local businesses to build and manage renewable energy production and stimulate local economies.  Unfortunately, Pacific Gas and Electric, the monopoly in Northern California, wants to undermine these policy goals and economic benefits to consumers through its Proposition 16 campaign (See my April 19 blog).

Future electricity production must also consider the “negation” of electricity use.  A negawatt is defined in the Smart Grid Dictionary as “A term that identifies watts of energy saved through a reduction in energy use or increase in energy efficiency.  It is the greenest form of energy.”  It is also called the “first fuel”, and it should be bought and sold like any other energy source.

There are growing numbers of solutions that enable homeowners to monitor and manage their electricity use, and create negawatts.  In other words, a consumer can actively participate in reduction of electricity consumption through new Smart Grid technologies.   Traditionally, utilities or third party aggregators enrolled customers into programs that usually delivered day-ahead notification of requests to reduce electricity consumption.  In the future, maintaining a stable grid with renewable resources will require real-time requests for electricity consumption adjustments (and energy storage too).  That implies low cost, high performance reliability in solutions that homeowners use to manage electricity consumption.  One of the most interesting technology platforms uses open source hardware and software – called OSHAN (Open Source for Home Area Networks).  Why is that important? 

Open source solutions (like Linux, MySQL, Apache –foundations of the Internet) have a solid reputation for top quality, reliability, security, and flexibility.  Open source solutions are created at fractions of the cost of traditional development cycles and eliminate risks of buying products that won’t work together. The OSHAN platform could play an important role in unleashing the creativity of software and hardware developers to create innovative products that manage and reduce energy use, creating negawatt value for consumers.   Just as the Smart Grid enables a broad base of participation in electricity production and consumption, technologies like OSHAN can propel the most cost-effective and easy-to-use energy management products into mainstream use.   I look forward to being a prosumer. 

I reviewed community websites and posts about PG&E’s smart meters and have a few New Year’s resolutions to suggest to PG&E and other utilities planning smart meter rollouts:

- Learn from PG&E’s sad tale – utilities must develop a thorough communication plan as part of a Consumer Enlightenment Model that explains the benefits of smart meters to ratepayers.  There is a tremendous amount of genuine confusion about the beneficial impacts of smart meters for consumers.  Many consumers have the impression that smart meters are great for utilities, but just an additional expense for ratepayers.   Utilities must communicate the “What’s in it for me?” messages tailored for residential consumers.   

- Part of the Consumer Enlightenment Model’s communications plan must include a statement that an old electromechanical meter can slow down over time, possibly resulting in under-billing in the past.  Therefore, when a smart meter is installed, it may be the first accurate reading of electricity consumption in many years.  One irate consumer reported that his electricity bill for a family of four jumped from $20 to $80 per month – therefore the smart meter was inaccurate.  I’d say the old meter was inaccurate since he’s not supplying any of his own electricity from solar, and $5 of electricity usage per person per month is awfully low for PG&E rates. 

- Provide communications training to their field resources and any subcontractors installing meters.  That training must cover the talking points about the benefits of a smart meter from the ratepayer’s perspective.   Telling consumers that smart meters will eliminate meter readers jobs is an accurate but insensitive statement to make during a recession with high unemployment.   

- Examine customer service scripts to deal with customer calls about increased bills.   A review of all call flows in customer care centers is in order to ensure that callers receive a smooth handoff from one department to another and strive to achieve “first call” satisfaction.

That old Ben Franklin saying about “for want of a nail, a shoe was lost” seems appropriate every time this litigation story comes up.  Lacking upfront, convenient, and accurate information about smart meters or any other visible and disruptive technology, ratepayers will seize upon misinformation, substitute opinion for fact, and develop attitudes (about utilities and smart meters) that will be difficult and expensive to change, slow down rollout plans and inflict damage on other Smart Grid initiatives.

Are you interested in learning more about the Smart Grid?  There are two opportunities coming up in early 2010.  The ITExpo will host its first Smart Grid Summit from January 20-22 in Miami, Florida.   The Grid ComForum Conference and Exhibition is scheduled for February 2-3 in Santa Clara, California.   See the events sidebar for more information.