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Coalition Forms to Address Consumer’s Smart Grid Concerns

Mary Catherine O'Connor | Wednesday March 24th, 2010 | 0 Comments

Over the past couple of years, the hype around the coming smart grid and how it would help lower energy consumption, provide better electrical service and incorporate renewable energy sources into the nation’s electrical grid, reached a fever pitch. But once the rubber started hitting the road, there were hiccups.

They started in Bakersfield, Calif., where a resident filed a lawsuit against utility provider Pacific Gas & Electric, claiming that the new meters installed on his home had tripled his power bill. PG&E countered that the higher rates were due to a hot summer and a longer-than-average billing cycle, but the seed of doubt had already been planted and consumer distrust of smart meters—which allow two-way communication between a utility provider and ratepayers and are a key element of the smart grid concept—started to grow. And in Texas last week, discontent with the utility Oncor, which had been rolling out smart meters in a number of cities, grew into an organized consumer group called Smart UR Citizens.  These consumers are also crying foul, claiming the new smart meters leading to inflated rates.

And then there are concerns over whether smart meters could degrade consumer privacy.

Millions of smart meters have been installed in cities around the country and the number of complaints is small, in comparison. Still, consumer backlash could stop the progression toward an upgraded, “smart” electrical grid dead in its tracks. Enter the SmartGrid Consumer Collaborative. Comprised of smart meter providers, software companies, utilities and trade organizations that all have a big financial stake in the smart grid, the group has formed as a nonprofit organization that is going to try to press the restart button on smart meter roll-outs by improving communication with consumers and consumer advocates, launching an education campaign to explain how the meters work and addressing concerns over data privacy.

The group held a press conference today to introduce itself and describe its plans. Members include IBM, GE and Control4 Energy Systems and, according to Jesse Berst, an energy industry analyst who is heading the group, a number of major utilities that have not yet been publicly named.

John McDonald, general manager of marketing for GE’s Digital Energy business, provided results from a survey GE conducted. It surveyed consumers’ knowledge of the smart grid in the US and Australia and found that only 4 percent of the US consumers had heard of the smart grid. Clearly, this group has its work cut out for it on the education front. The good news from the survey, however, is that among the small group that know about the smart grid, most understand how the upgrades are designed to work and how they will provide consumers better control over their energy bills.

Janine Midgen-Ostrander, representing the Ohio Consumers’ Counsel, a residential utility consumer advocacy, explained that in smart meter pilot programs being rolled out in her state, consumer education and an opt-in approach to testing the new meters are crucial. “Consumers need to be shown the value [of smart meters],” she said, adding that using a simple “build it and they will come” scenario isn’t going to work for ratepayers.

The Smartgrid Consumer Collaborative will “form a complete picture of what consumers need and want, and what the opportunities are for consumers to save money,” she added.

But it’s not going to be easy. Upgrading the grid won’t be cheap, and ratepayers will have to take on some of the costs, so utilities are already on alert.

Midgen-Ostrander says the key to dealing with costs is to focus on the longer-term benefits of a smarter, more energy-versatile grid and on avoiding the need for more dirty power plants in the future. We shall see.

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