Will consumers ever want to hug the stuffing out of the smart grid?

Like most people around the world, I find myself still thinking about those Chilean miners, more than a week after the rescue seen around the world.

I was at home in bed watching a live video feed as the capsule carrying the first rescue worker reached the bottom of the mine. The miners couldn’t wait to touch him, to hug him, to reach out to him, and the worker was visibly emotionally touched by their physical reactions to him.

It was an almost child-like reaction those miners had, wanting to make sure the rescue worker was real. It’s the same reaction we have when we’re confronted with something or someone that seems mythical. We want to touch it, to touch her. We want to see if it’s imaginary, and, when it is proven real, we want to embrace it and, as my mother would say, “just hug the stuffing out of it” because we’re so happy it exists.

I thought the miners were going to hug the stuffing out of that poor rescue worker, but, I honestly don’t think he would have minded. That moment where myth became flesh was too amazing to worry about one’s stuffing, really.

In the end, mythology was trumped by reality---after two months of those miners thinking the outside world atop their heads was unreachable, unthinkable, mythological, it became real again.

Mythology is a part of all human culture. We tell stories of great feats, and, if we can’t explain them scientifically, or if we have a large emotional reaction that such things can’t be reality, we tend to bloom them into myths.

The smart grid is no exception. It has its own mythology, especially to the average electric consumer hearing all sorts of horror stories about higher bills and problematic smart meters. The real issue with mythology is that it does not always feed on fact. It can feed equally on emotions, whether positive ones like the hope those miners had of returning to the surface, or negative ones like turmoil, chaos and fear.

With customers today, the smart grid mythology is a negative one and is, unfortunately, based on fear---fear of the unknown. While, as an industry, we seem collectively flabbergasted at the large number of negative stories on the smart grid that have been published in recent months, we have to realize the emotional distance between those of us “in the know” with smart grid technology and all those customers still in the dark.

We are on the surface, and, figuratively, those customers are in a mine, and what exists between the two camps are layers and layers of sedimentary mythology that we must, as an industry, find a way to drill through if we’re going to get those customers to see the smart grid in a positive light.

They need to see it, touch it, find out that it’s real and positive, but we can’t accomplish that by simply telling them it’s positive. You can’t pop a solid myth with pretty words. Unfortunately, mythology is a bit harder to fight and, once established, is much tougher to disperse. We have to accept that negative mythology, whether or not it is based on fact, has been established with customers and the smart grid. And, we have to stop griping about how the average customer just doesn’t understand. You’re right. They don’t.

But, if we don’t find a way to break through that rock-hard mythology, we may find that even the smart grid itself, every digital bit and byte and every physical meter, may fade from fact into mythology, as well. The question is: How do we show the positive truth of the smart grid to the average customer so that they want to just hug the stuffing out of it?

Lineman's Rodeo hits KC

I made a joke to my coworkers that, this weekend, I'm traveling in the beaten track of Wilbert Harrison---going to Kansas City, here I come. Sadly, even with my slightly off-key singing, few people get that joke anymore.

This weekend, Kansas City is host to the International Lineman's Rodeo. Well, more specifically, the rodeo plops down in Overland Park, a suburb of KC.

This is the 27th annual lineman's rodeo, and the 2010 version is packed with an exhibit floor and the rodeo events themselves, which happen on Saturday in Bonner Springs, Kansas, another suburb of KC. Everything's in the 'burbs these days.

Kansas City Power and Light along with Westar Energy are the host utilities for this well-attended event attracting the best of the best in lineman from across the country and around the world. The rodeo on Saturday pits utility teams against one another in a number of traditional lineman tasks from pole climbing to hurt man rescue. There are also a number of surprise "mystery events," where the teams don't know what they will be tested on until they get on site. (Last year, one of the mystery events was replacing a lightening arrestor. Southern California Edison won that event.)

The first Lineman's Rodeo was held in September 1984 with twelve participating teams from Kansas and Missouri. This year, there are teams from Canada, Hawaii and even Brazil, according to the show's registration people (whom I chatted with a bit earlier today). While the exposition that comes into play today and tomorrow before the rodeo is quite a draw (especially for free t-shirts), it's clear that the real excitement is yet to come---at the Saturday rodeo. When even your registration staff is excited, you know you have something special in hand.

The expo at the Overland Park Convention Center over the next two days features a number of exhibitors from Aircraft Dynamics to Buckingham Manufacturing Co., from Duratel to our own sister publication Utility Products. (Utility Products is currently neck-and-neck in the running for the best giveaway t-shirt, right up there with Bulwark, which has a line that extends out from its booth and down the aisle. T-shirts really are the thing here at the Lineman's Rodeo.)

Those handy folks at registration told me that, on average, the exhibit floor will take in around 2500 people today and tomorrow before the Saturday rodeo. Additionally, for this year, there are over 150 teams registered for the rodeo itself and around 200 apprentices. (It's a bit down from years past due to the economy, but the Lineman's Rodeo is still a very strong event indeed. That expo floor was packed when I left a few minutes ago, and Utility Products was darn close to running out of t-shirts, as were most exhibitors.)

Are you here at the Lineman's Rodeo? If so, leave me a comment or two about what you're seeing and hearing at the event. Reading this after the event? Tell me your favorite winners and moments at the rodeo.

Fess up, utilities: Smart grid stuffs may not save customer cash

Let me preface this entry by saying that I believe in the smart grid. I’m a fan. I think we need a smarter, more self-healing, more active, more adaptable energy system. It is, indeed, the wave of the future, the golden child, the technological messiah.

But, nope, it ain’t gonna be cheap.

Last week, I wrote a blog about the California governor signing into law a bill that (sorta) mandates utility targets for energy storage in the state. You can read it here, if you’re interested.

One of the comments I received was from a reader named Jim. He wrote:

Will investment in energy storage lower my energy bill? Of course not. Is this the most effective way to reduce green house gases? Not by a long shot. The virtue of this plan is that everyone gets to subsidize those who will make a lot money from it.

To be completely honest here, Jim is absolutely right. Is energy storage specifically (and smart grid or renewables generally) going to automatically start Jim’s electric bill on the path to negative numbers? Is the power company going to, eventually, have to pay him? Probably not unless he has own wind turbine or solar panels, and, even then, such technologies would cost him a lot up front for purchase and installation.

And, sure, energy storage is not the most direct way to reduce greenhouse gases produced by the power industry. The most direct way would be to just shut down fossil fuel plants---at least the most direct within our industry. But, we can’t do that. So, we have to look for some outside options that may be more than the mathematically logical straight line between two points. Sometimes, it takes a cloud of dots to clear the air.

And, in the end, will people make money off this stuff? Yes, they will. For AB2514 (that energy storage bill), the companies that make the equipment will make money. For the smart grid, yes, the companies that have those smarter technologies and can sell them will make money. That’s the way capitalism---fortunately or unfortunately---works. Those companies wouldn’t be in business if they didn’t have a profit margin.

And, in the end, the same has to be said for your utility. While they are highly regulated and while they don’t really get the free reign of capitalism that, say, Wal-Mart does, they are still a company and still trying to make a bit of money---while providing a valuable, important service. Whether or not such a service should be socialized, privatized, deregulated or regulated is another argument really. Here, we’re talking about what is.

And, in the land of “what is,” here are the facts:
(1) Smart grid technology costs money.
(2) Utilities can only take on so much of the up-front costs of smart grid before passing it on to consumers.
(3) We also need to seriously upgrade infrastructure for those smart grid technologies, and that, too, costs money.

So, yes, Jim is totally right. Why can’t we, as an industry, admit that? We often market the smart grid as a way to save the consumer cash, but, let’s be honest, that’s not always true. And, to so do, the consumer would have to be willingly involved---checking energy consumption, adjusting their use, understanding rate changes.

In the end, can we set aside the idea of selling the smart grid, renewable adoption and upgraded power technology as a saver of nickels and dimes and dollars? Instead, can we be more direct and say, “The smart grid is good for the individual, good for the marketplace and good for the country.”

As Martha Stewart coined, the smart grid is a “good thing.” It will allow for more renewables. It will give better information on power use, outages and issues. It will add technological options to the grid. And, sure, if you’re super dedicated to your in-home energy management unit and are willing to invest time (and perhaps cash if you had to buy and install that unit), the smart grid could save you money.

It could, but we’ll still need to pay for upgrades, research, investment and pilot programs before that happens. And, while a lot of that cost is being shouldered by utility companies, it is more than true that the average consumer is not going to see a financial benefit to the smart grid in the near future. They may get smarter, more reliable, higher quality energy. And, they may, in a few years, get to help with that greenhouse gas reduction, but it’s time to market the smart grid with it’s definite positives and let go of the idea that the average consumer can only be swayed to join the smart grid fan base if we talk about cash.

Let’s talk about change, about a smarter future. Let’s talk about cleaner energy and fewer outages. Let’s talk about more understanding with energy use and energy production. But, let’s stop talking about the almighty dollar. It’s just clouding an issue that should be about positive and necessary change and not about cost savings.

Governator to utilities: Invest in energy storage … maybe

California Governor Arnold Schwarzenegger signed AB2514 into official law this week, and it may change the face of the entire power industry if the details of that law spread to other regions in the U.S.

What makes this law so unique? It gets very close to mandating that utilities invest in energy storage systems to make connecting renewable power easier.

AB2514 requires that the California Public Utilities Commission (CPUC) “open a proceeding” by March 1, 2012 to discuss potential investor-owned utility (IOU) energy storage targets with a two-fold deadline---one set of targets achieved by December 31, 2015, and the second set by December 31, 2020.

There would be a similar set of requirements for public utilities, along with a plan for significant demand response activity.

"Energy storage improves the overall efficiency of our electric power system which will lower costs for consumers," said Assembly Member Nancy Skinner when the bill passed in June. "The Assembly's passage of AB 2514 is another step that advances California's clean energy economy and represents a great economic opportunity for the State."

"We applaud the Assembly's passage of this essential legislation, as well as Chairman Skinner and Attorney General Brown's leadership and commitment to moving it forward," said Janice Lin, Director of the California Energy Storage Alliance at the time of the bill’s passing. "This landmark bill puts California at the forefront of a growing global market that will spur economic development. Given major advances in energy storage, the industry is now ready to provide affordable, reliable products for California's utilities and consumers."

“California Governor Arnold Schwarzenegger just signed AB2514, an energy storage bill, into law this evening,” wrote Silent Power CEO Todd Headlee on the company’s blog. “The passage of this bill is a major step forward for reliable, clean and lower cost electric power for all Californians. Electricity storage will enable more clean, local renewable wind and solar power supported by clean storage. With storage, Californians will have clean power when and where they need it and with less need for new transmission lines.” (Silent Power, Inc. manufactures and markets distributed energy storage systems.)

CALMAC Corp., a company that manufactures energy storage equipment, released a statement after the signing by CEO Mark MacCracken.

“Energy storage is an excellent solution for making renewable energy sources more economically viable,” said MacCracken. “Energy storage is critical as we move toward the use of renewable resources and Energy Storage Bill AB 2514 is a step in the right direction for the future of our country’s energy needs. I commend the leaders in California that realized that solving our energy problems is not as simple as just putting solar on roofs and wind turbines on mountains, since solar and wind cannot be counted on to be there when you need them. I hope other states follow California’s lead.”

If the CPUC decides to create extensive energy storage targets, this bill could be a sign of things to come with other states in the area of renewable interconnections, but, of course, there is always the loophole: AB2514 only requires that the CPUC discuss the matter and set targets. There is no guarantee what those targets might be. And, in fact, they may decide that no targets are needed at all, to stick with the status quo.

But, AB2514 is certainly a promising start for the renewables camp to get a stronger foothold in the door of traditional energy. And, they are using the biggest stick they can find: the government.

Meditations on solar max, Max Headroom and naughty little business case genies

Ralph Abbott is a hoot to talk to. I don’t know if you’ve ever encountered him at an industry conference. (He’ll be hanging out in the RW Beck booth chatting up passersby and handing out his business cards which proudly declare him the founder of Plexus Research.) If you do run into him, though, ask him about the three risks.

It’s like three wishes, only negative---from a potentially quite naughty little genie.

Not that Ralph is a negative guy. He’s certainly not. As noted, he’s a hoot. But, he does have three specific concerns about smart grid and communications. And they are quite valid.

His first concern: What about the sun, man?

I know. Seems like a hippie liberal issue, but it’s not, my friend. The sun impacts all. What he’s getting at is solar max. Solar max isn’t an ‘80s icon you don’t remember well because you’re still fondly recalling Max Headroom. No, in fact, solar max is short for solar maximum. It’s a measurement of solar variation. It’s about sun spots and, while it still sounds odd, that does impact things here on Earth like weather, surface magnetism and radiation.

What’s the bottomline here with solar max? Well, it impacts something much more directly than weather here: It can create odd havoc with communications. The scientific explanation involves refraction and ionized solar photons. But, the basics are: It gets all wiggy with radio frequency (RF).

Ralph noted that solar max is on a 17-year cycle with experts expecting it to peak between 2012 and 2014, which could cause issues with utilities’ RF use. Ralph’s question to the industry echoes more Dirty Harry than Max Headroom though: Are we feeling lucky?

In other words, are we just going to ignore solar max and hope it doesn’t cause massive issues, or does someone, somewhere have a plan?

I know. That’s only one risk and already you’re a bit concerned. Try to maintain your calmness.

His second concern: GPS.

Okay, not all of GPS. Not your Mr. T-speaking TomTom alight on your car dashboard that gets you to the Kenny Rogers concert without getting lost on Oklahoma’s unlit, unmanned and unsigned back highways. That’s not the GPS Ralph is concerned with. He’s more concerned with GPS satellite timing signals, which would keep all your smart grid equipment on the same reliable beat, you might say.

But, as Ralph pointed out, GPS can be easily jammed with about $200 worth of over-the-counter parts and an ability to get within 150 feet of the equipment. So, like his concerns over solar max, he has some questions, like: What’s the risk of GPS jamming to utility operations? What’s the threat level, really, and what counter measures are we taking?

Hopefully, you’re not panicked yet. We’re on to risk number three, and, luckily, this risk doesn’t really make us fear the minor jammer or the almighty sun. Instead, this final risk revolves entirely around the almighty dollar.

His third concern: The business case for AMI.

How many articles have we all read---and, also, have I written---on proving a business case for AMI? I’ll estimate it topping Super Bowl ticket receipts from last year. Seems like millions, doesn’t it? But, Ralph wants to know if they are really getting to the heart of one specific area: using demand response as the ‘sweet spot” to get to goal on operational savings.

See, demand response is rather an amorphous term. It’s here. It’s there. It can mean different things to different folks (rather like the term “smart grid,” really).

Let’s say you need to prove your AMI business case and you know a few savvy facts. You know that five percent of your consumers will change their power use according to demand response ideals if you just tell them all about it, if you just give them good info. They are really that darn motivated.

But, you also know that if those consumers had in-home gadgets that let them visually see the information in real-time, that number would jump to 15 percent. So, you pencil in that number in your AMI business case, cuz that’s a delightful number, really. Helps all those other numbers look better. But, are you figuring in costs of those in-home devices, or are you saying to yourself, “Self, those consumers are gonna be just fine going to Radio Shack or some other fine establishment and buying their own devices and installing those devices themselves.”

This leaves the pay out for that in-home device in the pocket of the consumer, which is lovely for that AMI business case but perhaps not so practical in the real world. Because will that person really be excited about taking time out of their day and going down to the Shack and picking up that purchase and then going home and installing that thingamajig? And who do they call if the thingamajig doesn’t light up with all the bells and whistles the consumer expects?

One response Ralph got when he asked around about that question to a few utilities, “I don’t know who they call, but it ain’t us.”

So, if it ain’t us, who is it? And is this a magical view of consumers where they are all tech savvy, gung-ho and willing to pay for demand response benefits up front? What if that magical view is woefully inaccurate? How will taking on consumer-side technology, questions, installations, problems and follow-ups impact the business case for AMI?

Those are Ralph’s meditations these days. You’ll be able to read more about them in an upcoming issue of POWERGRID International magazine. If you can’t wait until then, track him down at the nearest conference and ask him to expand on these risks. It may be the most interesting meeting you have at that conference.

More from my Autovation notes: Ben Koch

Ben Koch, managing director in the corporate finance division of SWS Group, joined Austin Energy’s Mele at Autovation’s opening keynote session at the Austin Convention Center on September13. While he didn’t talk as much about communication as she did (see previous blog on Autovation by clicking here), Koch did mirror the executives at Itron and Cisco and discuss collaboration.

“We’re all on this road to a true end-to-end smart grid together,” he told the audience.

While Koch noted that there have been—and still are—obstacles on the road, the path is getting smoother and the industry is making progress.

“The smart grid has persevered,” Koch said, despite challenging economic conditions, complex integration issues, consumer skepticism, regulatory pressures and evolving standards.

While Koch admitted that financing is still an issue, he pointed to the Obama stimulus money for smart grid as being “on the right path” and noted that third party private investors are stepping up, offering nearly $500 million for smart grid products this year alone.

“On the private side, [companies] believe in smart grid opportunities,” he stated.

In the end, that investor faith in the smart grid was the one idea Koch really hoped every audience member would take away from his speech at Autovation.

“Investors are following [the smart grid] closely. They are willing to put capital to work,” he added.

Koch added that the smart grid market has a number of positives that investors look for, including growing market opportunities (1.3 billion electric meters around the world, for example), unique technology solutions and scalable business models.

While the gray area of emerging-but-not-definitive standards and significant consumer issues still remain, Koch doesn’t see those as impossible mountains to climb.

He said, “There will always be challenges in a market this size, but they will be overcome. It’s a great time to be in the [smart grid] market.”

Live from Autovation: It's all about communication

It seems the buzz words at Utilimetrics' Autovation conference in Austin this week center around communication: communication in its techy automation form, communication with customers, and communication between vendors.

The communication fest began during the opening keynote this morning. Austin Energy's Cheryl Mele, the COO, talked about the utility's extensive program to exchange those regular old, outdated meters for smarter, sharper ones. And, even with that program, it was all about information distribution.

"One of the most important things we did during this exchange process was communicate."

And communicate they certainly did: flyers, press releases, post cards, door hangers, even a dedicated customer call center to answer all the questions about the meter exchange process.

Communication with customers was also on the minds of David Elve and Matt Zafuto with Sensus when I stopped by their booth on the Autovation exhibit floor today. Elve was discussing the importance of managing customer expectations and Zafuto agreed that being in the customer business is part of being in the automation business these days.

"Utilities don't react with customers very well, and traditionally they haven't had to," Zafuto pointed out. Comparing the current state of smart grid development as the "awkward toddler phase," Elve and Zafuto noted that utilities have the tech available to them, but now they need the technique, the flexibility to change plans as feedback from customers and other partners changes the needs of the smart grid---two-way communication both technologically and socially.

Itron and Cisco discussed the need for partnership communication as they expanded on their original announcement on the partnership subject during a press conference at Autovation.

Philip Mezey, senior vice president and chief operating officer for Itron North America, noted that a lack of trust and problematic scalability has created a push back against current smart grid advances but that he hopes this collaboration between his company and Cisco will announce a new state of affairs in the industry, one of communication and collaboration between vendors.

Paul De Martini, chief technology officer and vice president of strategy for the smart grid business unit at Cisco, added that it is "time for the industry to move out of the embryonic stage and start real deployment," which would include a standards-based approach with better communication and more vendor partnerships. This would allow for "creativity and innovation" in the smart grid marketplace, according to De Martini.