More electric utilities need to install 'smart' meters that show real-time costs and reduce power demand.
Many power utilities are gearing up to install "smart" meters in kitchens or living rooms to show customers the cost of their electricity use – per minute and perhaps per appliance. During times of peak usage, utilities may even remotely adjust your home thermostat.
Having an instant electric bill on the wall, with dollar signs rolling like a gasoline pump, is designed to create sticker shock – and then, perhaps, a conservation ethic to help curb climate change. People might cut back their use of power-hungry devices, from clothes dryers to the TV "sleep mode." They might, for instance, turn on dishwashers only after 10 p.m.
Some utilities hope to install "intelligent sockets" that communicate between appliances and the electricity provider. On hot summer days, when electric rates would be raised through "dynamic pricing," those customers who voluntarily give up control of their usage – and it would have be voluntary – would be given rebates.
But can such watt-saving steps help save the planet? Yes, if they keep utilities from building more carbon-spewing power plants – especially the expensive kind that rev up only during peak hours. By many estimates, fossil-fuel power plants are likely to be the preferred source of electricity for years to come.
As it is, utilities can't keep up with rising demand. One projection shows a 19 percent rise in peak-time electricity usage over the next decade while only a 6 percent growth in power capacity.
Something's got to give. And it may be consumer lifestyles.
A three-year experiment in California with 2,500 customers showed they reduced their average electricity demand by 13 percent during peak summer hours when they had to pay five times the normal cost. Users with the kind of "smart" thermostats that adjust appliance use cut back by 27 percent.
Even if smart meters cut usage by only 5 percent nationwide with "time-of-day" pricing, that would save about 625 combustion turbines from being built and reduce overall industry costs by about $3 billion a year, according to a study by The Brattle Group, a consulting firm.
But such savings won't come cheap.
The cost of installing what's called advanced metering infrastructure (AMI) – with new meters alone priced up to $200 – may take years for utilities to recover. Many in the industry are balking at the up-front price tag, the technical challenges, and the uncertainty of consumer reaction to volatile prices and in-your-face meters.
Sensing resistance, Congress nudged utilities to adapt AMI in its 2005 energy law. Several states, especially California, are pushing it hard. At present, though, AMI is used in only about 6 percent of meters. State regulators need to be more aggressive in forcing utilities to give up the old practice of selling as much electricity as possible with flat-rate pricing and meters that consumers don't understand (and can't easily see). One idea is to "de-couple" a utility's profit from its electricity sales by guaranteeing a set rate of return.
Electricity providers need to become facilitators for their customers in achieving energy efficiency and reducing their carbon footprint.
Being "smart" isn't only for meters that alter electricity usage.
It's for the planet, too.