Monday, April 06, 2009

Wolf In Sheep's Clothing? The Beef With Smart Grids

Business Week's Heather Green takes a fresh look at smart grids through prism of the Stimulus Bill. Like a lot of the projects contemplated by government spending spree, stimulus cash for smart grid technology comes with strings attached.

Most significantly, utilities have to commit to flex-pricing-- raising and lowering the cost of power with demand. That has consumer groups girding for battle.

Green reports:

"But there's a hitch. From California to Colorado to Maine, consumer groups are expressing concerns about these efforts. In particular, they're leery of giving utilities the ability to change electricity prices on the fly, jacking rates up on hot summer days, for instance. Most utilities are prohibited from using variable prices now, but the flexibility to raise rates for a community as demand rises is essential for utilities to get the full benefit of new technology. Consumer groups worry these so-called smart-grid technologies are just another way for utilities to make extra money off consumers. "It's the biggest hype since electric [deregulation] and has the same amount of factual basis," says Barbara Alexander, a consultant for several state consumer advocates.

Battles are likely to break out across the country in the months to come. Utilities are stepping up their lobbying of state regulatory commissions to get support for flexible pricing and technology investments so they can claim their slice of the $4.5 billion in matching funds from the stimulus package. "

And if you're in the market for a quick, concise primer on what exactly the ubiquitous "Smart Grid" terminology actually entails, Green offers this helpful summary:

"A range of technologies is used to create smart grids. Sensors on long-distance transmission lines help pinpoint network problems, while monitoring systems can let homeowners with solar panels sell back electricity to a utility when prices are high. At the heart of the debate are so-called smart meters, which would be installed on people's homes in place of the old models. They can relay information about electricity use and price to consumers and let utilities collect usage data wirelessly without trucks or meter readers."