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Wise Up About the Smart Grid

Big changes are coming to an electric meter near you. Will it benefit everyone?

August 2020

It’s the wee hours of the morning on a late summer day predicted to break 100 degrees. Strong gusts rush over the hills to the west, spinning giant turbines in a wind farm to maximum rpm. With a literal windfall of power pouring into the electric grid, a coal-fired generating plant in the network reduces output. Automatically, information runs through transmission lines, and your new “smart” refrigerator — in need of an energy-consuming defrost cycle — picks up the signal wirelessly. It decides to defrost now while demand is low and electricity is unusually cheap.

Later, before leaving for work, you glance as usual at your home energy settings on your laptop. The electric company expects heavy load on the system today, and is asking to remotely raise your thermostat and turn down the water heater this afternoon. You agree conditionally. Your high-school-age children will be at sports practice then, but you’ll need the full arctic blast in effect by 7 p.m., when a group of old friends comes over for dinner.

Late afternoon, as you march through the workday, your plug-in hybrid car is doing its own business parked in the company garage. It discharges unneeded battery power into the grid at the peak of demand. Since you charged your car overnight, you’re selling at a far higher price than you paid. It’s not big money, but it’s nice on those rare occasions you can stick it to the electric company, rather than vice versa.

Building a smart grid

That’s a picture of how things could be for some of us in 10 years. Currently, of course, our nation’s electric grid — a sprawling patchwork of power plants, transmission lines and distribution networks with technological roots in the days of Thomas Edison — bears little resemblance to the hypothetical future “smart grid.”

Called “the largest interconnected machine on Earth” in a recent U.S. Department of Energy report, the grid usually remains in the background as it lights our homes and offices and powers our appliances and gadgets. If we ever give it a second thought, it’s once a month at bill-paying time.

But America’s arms-length relationship to the grid is about to change. Utilities nationwide, with strong government encouragement and funding, are pressing ahead with modernizations that will add sophisticated communications and IT capabilities to the grid in hope of increasing energy efficiency and preventing blackouts.

“The investment we are making today will create a newer, smarter electric grid that will allow for the broader use of alternative energy,” President Obama declared last year as he signed into law the 2009 economic stimulus bill, which contained $4.5 billion for smart grid investment. “This investment will … make our energy bills lower, make outages less likely and make it easier to use clean energy.”

Whether it finally lives up to its billing or not, the coming of smart grid seems certain to dramatically change the way we get our electricity. And it should all begin happening relatively quickly, said the lead government official overseeing smart grid standards development.

“We have about 140 million residential meters in the country, and over the next five years, we expect up to 50 million of them will be upgraded to smart meters,” said George Arnold, National Coordinator of Smart Grid Interoperability at the National Institute of Standards and Technology (NIST).

Behavior modification

Smart meters are just one potential aspect of a smart grid, but once in place, they could lead to major, and potentially troubling, changes for electric consumers. A normal meter typically gets read monthly. Smart meters provide continuous information about electricity consumption.
This enables utilities to enact what’s widely seen as a central function of the future smart grid: higher charges for electricity at times of the day when generating capacity is nearly maxed out. It can be seen as behavior modification encouraging consumers to use technology and lifestyle changes to spread electricity usage more evenly throughout the day. There are indisputable advantages—economic and environmental—of doing so.

“Our whole system is engineered for these peak periods, and about 20 percent of the entire grid capacity exists only to manage a few hours a year of peak load,” NIST’s Arnold said. “If you could spread out that peak load, you could get far more from existing infrastructure.”

Trimming the peaks, when strained utilities run most inefficiently, can greatly cut greenhouse gas outputs. Just as vitally from a consumer standpoint, spreading the load more can also eliminate the need to raise electric rates to build expensive new power plants to handle peak events.

Smart for everyone?

But the moves nationwide toward smart metering are a cause for growing concern among consumer and citizens’ rights groups.
Some of the questions are about the effect of constant metering on privacy—do the smart technologies that give consumers and electric companies new ways to monitor power usage also make us more vulnerable to nefarious monitoring?

The potential for constantly varying electric rates controlled by utilities is causing even more worry. In states like Maryland and Colorado, smart grid and smart metering projects have been stopped or put on hold by questions about how the projects could affect disabled and low-income populations.

Smart grid proposals like one in 2009 by Baltimore Gas & Electric (BGE) in Maryland could cost each household hundreds of dollars for meter installation and have very unequal effects on monthly bills, said Janee Briesemeister, a legislative representative for AARP specializing in utility matters.

Higher-income, higher-usage customers in big homes with lots of appliances have many options to reduce electric usage, Briesemeister said. But the same pricing could hammer lower-income people in small homes or apartments. Many have few ways to cut consumption that don’t impact their quality of life and health.

August 2020

It’s early afternoon on the same sweltering day 10 years from now. As the temperature nears 100 and electricity demand skyrockets, the advanced communications capability newly built into the electric grid takes control of air-conditioning units and smart appliances throughout the region, turning them down, and even temporarily switching them off from time to time to reduce peak demand.

In her central city apartment, a woman in her 70s, disabled by a serious heart ailment, moves frozen water bottles from her freezer to her refrigerator in hopes of reducing the appliance’s energy use during the peak pricing period. The 15-year-old appliance that came with the apartment uses a lot of electricity and can’t talk to the new smart electric grid. The landlord, who doesn’t pay the electric bill, has little interest in upgrading.

At 1 p.m. sharp, when the electric rate skyrockets, she switches off her small window air-conditioning unit, keeping the windows shut to retain the pent-up cool air as long as possible. Despite chronic heart problems, she turns off the appliance during the heat of the day all summer long — her only effective way of reducing electric use. Otherwise, she fears, she couldn’t pay the bill.

Making it fair

AARP Maryland and the state’s Office of the People’s Counsel, a governmental consumer advocate, opposed BGE’s smart-metering proposal. And in June, the Maryland Public Service Commission sent BGE back to the drawing board, turning down the proposal to recoup the $835 million cost from consumers.

“This rush to install smart meters has gotten ahead of the policy discussions about how much it will cost to install them, how it’s going to affect consumers’ rates and how it could affect consumer health and safety,” Briesemeister said. “There are far too many unanswered questions in these proposals.”

BGE is now weighing its options for moving ahead with smart grid, company officials say. While awaiting the ruling, Mark Case, BGE vice president of strategy and regulatory affairs, said an upgraded power grid benefits everyone. “Even people who are already using power very efficiently and don’t have much to cut are going to see benefit from other customers’ savings,” he said, because greater efficiency eliminates the need for new power plants and keeps bills lower.

‘Almost inevitable’

Whether or not the country will switch over is not really an issue, according to Bracken Hendricks, an energy efficiency expert who has written a plan for moving America to the smart grid. Imperatives like rising energy costs, growing demand, and the need to offset climate change with renewable energy are too strong to ignore.

“The energy system has to move,” said Hendricks, senior fellow at the Center for American Progress, a liberal Washington think tank. “Sort of like the growth of the Internet, the information age is penetrating our energy systems.

“But how we do this is a big question — because there are technical questions, legalities and the necessity of benefiting as many people as possible.”

Citizens and consumer groups like AARP have a large role to play in helping settle regulatory issues like pricing, Hendricks said. One method to protect vulnerable populations would be to tailor programs similar to current lifeline plans — which provide for reduced rates to low-income older and disabled people — to work with time-of-use rate plans.

And, he said, the new rate plans could well result in savings for many older people able to adjust their use of electricity around afternoon peak times.

“The smart grid is almost inevitable,” Hendricks said. “The job is to figure out how to build a smart grid that will protect the elderly and vulnerable populations while it benefits everyone.”

Chris Carroll lives in Maryland.