The Smart Grid is Coming! What’s a Smart Grid?

Several hundred utility executives, government regulators, and engineers have gathered in downtown San Diego this week for a three-day conference that is focused on what may be the utility industry’s biggest paradigm shift since the Tennessee Valley Authority electrified the Southeastern United States.

The only problem is that it’s the biggest paradigm shift that people have never heard of.  A Harris Poll recently highlighted the fact that U.S. utilities have committed billions of dollars to upgrade the electric grid by installing new “smart meters” in homes and businesses. But the Harris Poll shows about two-thirds of Americans (68 percent) have never heard the term “smart grid” and 63 percent don’t know what a smart meter is.

So for at least some people, you got it here first: Instead of merely tracking how much total electricity (or gas, or water) a customer uses each month, a smart meter tracks a customer’s usage continuously throughout the day and uses wireless technology to automatically transmit the data in real time to the utility. This automated meter reading technology makes it possible for regulators to set prices that vary at different times of day—and which encourage or discourage consumption—based on the relative cost of power production and periods of peak energy demand. As the Harris Poll shows, if the price of electricity changes according to how much it actually costs to produce, three out of four people want to be able to see and control how much electricity they are using.

So why are smart meters a big deal? And why should technology innovators care? A few highlights from the “Metering America” conference are in order:

—In California, the big three investor-owned utilities are in the process of deploying 12 million smart meters, covering about 80 percent of the state’s population at an estimated cost of $4.5 billion, according to Commissioner Nancy Ryan of the California Public Utilities Commission. Ryan told the “Metering America” conference that utility rates based on time-of-day pricing related to the cost of producing electricity must be coupled … Next Page »

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Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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