June 21, 2011 at 4:46 PM ET
The Obama administration unveiled a string of new initiatives last week that will pump political muscle and federal dollars into the development of the smart grid. Did you miss the news? You're not alone. Most of us don't really know what the smart grid is or care that much about it.
This lack of knowledge about and interest in the smart grid is the biggest impediment to its implementation, the energy consulting firm Black and Veatch found in its annual survey on the electric utility industry.
"That's been a constant problem," Mark Gabriel, a senior vice president with the firm, told me on Monday.
He defines the smart grid as the overlay of computing and communications on infrastructure, a process that has been ongoing for the past 50 years.
These developments have made the grid more reliable, more efficient, greener and supply us with information than can reduce our electricity bills. The utilities have done such a good job, Gabriel argues, that we take a reliable, efficient grid for granted.
"So now when we talk about a smart grid, by implication that means we used to have a dumb grid," he said. "We really don't."
But increases in computing power and customer expectations of what's feasible with that technology have evolved rapidly in recent years. This leaves customers playing catch-up on what the smart grid means for them and, as they learn, a bit paranoid.
For most consumers who have awareness of this technologically advanced electricity infrastructure, the term "smart grid" is interchangeable with smart meter — a device that tracks how much electricity is flowing into a home at regular intervals and reporting that data back to a utility company.
The utilities can then use this information to provide consumers with more detailed billing as they gain a deeper understanding on the power demands in neighborhoods so that they can better manage the flow of electricity, saving themselves and, ideally, the customers, some money.
Just 35 percent of Americans are aware of the phrase smart grid, Ecoalign, a Washington-based energy and environmental marketing agency, found in a recent survey.
This is partly because in many of the regions of the country, the meters haven't been deployed and where they have been utilities have done a poor job communicating the benefits of the technology, Jamie Wimberly, the CEO of Ecoalign, told me on Monday.
But the survey also found that consumers want more engagement with their electricity providers, including information on the benefit of smart meters.
"Many households are already stressed as far as their own finances and they are looking for ways to manage any upward pressure on their pocketbooks," Wimberly noted, adding that electricity rates are bound to rise in the coming months and years.
Smart meter technology holds the promise of helping consumers save on their electricity bills by, for example, allowing consumers to opt-in to pricing schedules that have cheaper rates in off peak hours, such as late at night. Switching tasks such as running the dishwasher then could save a bit of money.
One problem with sharing that level of detail with the utility company is that it can feel like a breach of privacy. You may get a cheaper rate for doing your dishes at two in the morning, but now the utility knows you're doing dishes at two in the morning.
The privacy issue
Anthony Rowe is an associate professor of electrical and computer engineering at Carnegie Mellon University who is studying the issue of smart meters and privacy.
On the macro level, he said, smart meters are not much of a problem when they help out utilities with billing and power management. Rather, it becomes an issue when smart meters are hooked up to pieces of equipment inside the house so that devices can talk to each other, so, for example, an energy meter and a smart thermostat that talk to each other
This could be good if you leave on vacation but forget to turn down the thermostat. A smart meter might figure out the house is empty based on low overall consumption and turn down the heat automatically. You could also log on from the beach, drink in hand, and do it remotely.
"The real issue there, though, is how is that information going to be managed?" said Rowe. "Now you have a bunch of other companies which are not necessarily just concerned with billing you with energy data that are going to be getting access to this information."
For example, the highest-tech smart meters available today are sensitive enough for someone who cares to infer not only when you are turning on and off different kinds of appliances — dishwasher, dryer, TV — but potentially even brand of appliances.
While utilities are not all that interested in this information, it could be quite handy for appliance manufacturers, consumer electronics manufacturers, insurance companies, even law enforcement.
Say, for example, the meter picks up on the fact that your refrigerator is on the fritz and the utility company has inferred what brand of appliances you prefer. So, for a fee, the utility sends that information off to the appliance manufacturer, saying it would behoove them to send you a flyer for a new fridge.
Insurance companies could use the electricity data to infer the habits of person applying for life insurance. If it appears that all they do is sit around the house drinking beer and watching TV, they might considered that person a high risk and deny coverage.
"You can imagine there are applications in law enforcement too," Rowe noted. For example, detailed electric consumption rates might tell whether a house is harboring a fugitive. A lot of electricity consumption all day long? That could be a sign of growing something illegal under the lights.
So, as smart meters are rolled out across the country, Rowe said policy makers need to be clear on who has access to the data and give consumers ultimate control over how much information they want released.
"Right now, there is a little bit of a problem with some people being a little paranoid about it, which mostly comes from a lack of understanding," Rowe said.
Gabriel, the Black and Veatch consultant, noted that the paranoia is unjustified. "It is just not the granularity level of big brother watching you through the TV set," he said. "It just doesn't exist."
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