Is 'saving money' the right smart grid pitch?
- Posted on May 7, 2012
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I find it instructive to see how smart grid plays out in the news because your customers consciously or otherwise pick up key messages this way.
To wit: Commonwealth Edison just began work on the grid modernization package approved by the Illinois legislature last fall and covered in our "ComEd Stands by Grid Legislation" and "ComEd Wins Smart Grid Okay." The Joliet Herald-News provided a bit of coverage on Saturday.
"If all goes as planned," the writer qualified her lead, "ComEd customers should see their bills shrinking and their lights staying on more often over the next decade."
Grid modernization "will significantly reduce outages, help customers manage their power use and save them money," the article continued. "The modern grid could report problems itself, alert customers' cell phones when power is restored and `heal itself' when there is a problem on the line."
ComEd customers will pay an average of $3 per month and see digital meters and other technologies including distribution automation rolled out over a decade. The latter work aims to isolate faults and reroute power around an outage, limiting its impact.
Although some customers have lobbied to retain their old analog meters, "the Illinois Infrastructure Modernization Act states the new meter will be provided to all customers, and the value hinges on having everyone participate, officials said."
About a month ago, The Chicago Tribune did a piece—"ComEd to Create Outage Command Centers in Suburbs"—that promised more:
"Hoping to avoid a repeat of the chaos caused by widespread outages in last summer's storms, Commonwealth Edison announced Wednesday that it will set up temporary operation centers in areas where 20 percent of customers go without power for three hours or more..."
"At one point more than 850,000 people in northern Illinois were without power for days," the Tribune continued. "Outraged customers turned out en masse to a hearing in Highland Park to complain about lost work time, rotten food and an automated system that provided wildly inaccurate power restoration times."
The Act that enabled grid modernization tied reliability to ComEd's compensation, plus the utility scrapped an ineffective, automated restoration information line, add lines to its call center and beef up first responders. A smartphone app is on its way.
The state attorney general had argued that ComEd should compensate those with damages in last summer's storms, while the utility argued that blackouts are unpreventable acts of nature. The state attorney general had found "a neglected system littered with decrepit utility poles, equipment choked by vegetation and transformers dating to the 1950s."
The point I'd make is that this coverage is packed with promises, including that energy management will result in actual savings—"shrinking bills" is the phrase few consumers would buy—and fewer outages, with convenient restoration times sent to mobile phones. All for $3 per month.
The issue is whether those promises are credible and deliverable. David Kolata, executive director of the Citizens Utility Board, wisely called this "a step in the right direction" albeit one that "will depend on implementation." And education, if not more.
Another piece in the Tribune two weeks ago underscored the latter point. "For Many, ComEd's Smart Grid Needs an Explanation" reported that many participants in ComEd pilot projects had not been able implement any significant energy management recommendations or save money.
My take? These are the vagaries that utilities face when offering long-term value propositions. The term "shrinking bills" is particularly unlikely to come true. And the newspaper forum found the "deadly smart meter" riff alive and well in Chicagoland.
Would it be more honest—and therefore more credible—to acknowledge that electricity prices will almost certainly rise going forward and that active management, at best, can mitigate that rise? It's tempting to say customers will "save money," but if it turns out not to be true, the industry has squandered significant good will on billions of dollars of investment by customers. Likewise, we've seen recently that improvements in outage management are not a preordained result of grid modernization. (See "Managing Expectations on Outages?")
On the other hand, incremental cost increases to pay for grid modernization—to the tune of $3 per month—over a decade has the virtue of being low impact over a time frame that lends itself to customer apathy.
Despite the low cost per customer and the mind-erasing timeline, I wonder whether the arguments that ComEd and its peers are putting forth are worthwhile or should be tempered.
Readers, please weigh in with your thoughts.
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