More than half a million homes and businesses in Sacramento, Calif., will be equipped with smart utility meters by the end of 2011, promising consumers sophisticated tools to manage energy consumption and helping the local public utility deliver power more efficiently.
Sacramento is just one example of how billions of dollars in federal stimulus funds are jump-starting smart-grid investments. The Sacramento Municipal Utility District (SMUD) was one of 100 utilities to win a piece of the $3.4 billion in smart grid funds contained in the American Recovery and Reinvestment Act (ARRA). Indeed, SMUD was one of the nation's more successful applicants, pulling down $128 million for smart meters, dynamic pricing, electric vehicle charging stations and home energy management systems.
These funds are speeding up the transformation of electric utilities, where methods of delivering electricity haven't changed much in the past 50 years. A smart grid usually involves a utility reading customers' energy usage remotely via digital meters, which also can be used to activate and deactivate services. The meters will measure power usage on daily, rather than today's standard of monthly measurement. Smart grids also typically feature more energy-efficient ways to move electricity around the power infrastructure.
SMUD expects to deploy 600,000 smart meters by December 2011. As more automated meters are installed throughout the United States, opportunities grow for additional IT devices to be connected to those meters. For example, the utility envisions innovations that will let citizens remotely control their air conditioners, refrigerators and other electronic devices. In SMUD's case, the grant money also will pay for new tools designed to help it better use renewable energy sources like solar and wind.
Although SMUD had already planned to convert to smart meters, the utility was on a much slower deployment plan without stimulus money. But while ARRA funds are accelerating activity for SMUD and other grant recipients, there's lingering uncertainty that stimulus investments will propel this movement beyond the projects that already have been subsidized.
A smart grid, as most in the industry define it, utilizes more than smart meters. Many believe a smart grid should take a greater amount of its power from renewable energy, update its mechanisms for passing power around the infrastructure and enable citizens to track their power usage. Households that monitor power consumption might find ways to conserve energy and cut their utility bills, which alleviates strain on the grid. SMUD plans to let users track their daily electricity consumption on the utility's Web portal, and is testing in-home technologies that could provide even more granular data. This is another area where stimulus money plays a role. ARRA grants are funding SMUD's development of user-friendly devices that could show the amount of power consumed by each electronic device in a customer's home.
Bill Slaton, a member of SMUD's board of directors, sees a market for tools that would let residents control all electrically powered devices in their homes remotely via the Internet. Those capabilities, while possible today, are beyond the reach of average consumers.
"It's not to the point where you just go down to Home Depot and there are seven choices for how to do it, and you buy one and plug something in, and it works," Slaton said. "Right now, it's still at the geeky stage - the techno-geeks. I'm one of them, so my house is automated. I've figured out how to do all of that stuff, and I can actually control my house from my iPhone. But I'm the exception, not the norm."
Slaton said growth in smart grid deployment will spur the market to offer more of these devices.
With renewable energy viewed as essential to
any smart grid, utilities also need technology that ties together many disparate power sources, he said. Renewable energy generation often happens in small amounts over a large area. For example, one can hardly drive through a California suburb without spotting rooftop solar panels. SMUD likes the idea of buying the excess power generated by those panels, Slaton said, but it would need a way to connect and measure the power taken from them. New technology also plays a role in managing the inconsistency of renewable energy sources - for instance, triggering backup power generators when solar panels lack sun.
Moving to a smart grid also spells big changes for municipal utility workers. SMUD's transition to automated meters will eliminate the need for workers to drive to meters and manually record data.
"We started telling our meter readers several years ago that this was coming," Slaton said. "So the hires who we did hire, starting about four years ago, knew these were temporary jobs. This was not going to be career employment as a meter reader."
A large portion of younger workers will transition to other jobs within the utility. An alternative role for these employees could be answering customer service calls about bills or service. Managers of the meter-reading employees will switch to managing call-takers, according to Paul Lau, SMUD's assistant general manager of customer, distribution and technology.
Meter-reader managers currently spend much of their time in the field following up on complaints about unusually high bills and suspected electricity theft. After digital meter installation, these managers will view usage analytics and proactively search for potential problems. The job routine will involve dividing their time between the office and the field. A large number of older managers plan to retire as a result, because they don't want to sit in offices, Lau said. Many of the younger managers, by contrast, welcome the change.
"They say, 'Instead of being in the field all the time, I can do a combo. I can do the analysis, and I can actually run out there and see which ones need follow-up and figure out how I do those investigations,'" Lau said.
Smart meters also will alert SMUD to power outages before citizens report them. Now when outage reports hit SMUD's phone system, technicians in a map room try to deduce where to send repair crews. Frequently SMUD dispatches several trucks to determine exactly which power lines need repair. But with smart meter's accuracy, Slaton said SMUD can quickly determine which equipment needs fixing and can send one crew to fix it.
Times are changing for customer service call-takers too. SMUD will train employees on software designed to troubleshoot billing questions. Today when a customer reports an unusually high bill, call-takers normally transfer the complaint to management for investigation. A few days later, the caller receives feedback on what might have caused the high bill. With daily reporting from smart meters, customer service call-takers will do much of the investigative work on the phone with the customer.
"If you have a bill that comes through, you may say to the customer, 'On this date, your usage was much higher than normal. Did you have a party that day? Were you traveling? Were your kids at home or was it an exceptionally hot day?'" Lau said. "In the past, customer service representatives would ask the questions, but they wouldn't have any data in front of them. The customer wouldn't have any data in front of them either."
When customers call to complain about power outages, call-takers will be able to see whether power is flowing to the building. The software also will show which of the customer's neighbors have power. From there, the call-taker can
suggest that the caller check his or her breakers or potential circuit shortages.
SMUD has work groups training customer service representatives on the software and developing new job descriptions for the managers.
Stimulus funds are fueling the smart grid's growth, but some industry observers say that without new incentives, activity will stop when those dollars dry up.
"In the current environment, unfortunately it is still not easy to make a business case for some of these implementations," said Zarco Sumic, vice president analyst for Gartner. "You really cannot justify the smart metering just on the operational benefits in the current regulatory setting. You need to be able to capture customer and environmental benefit, which the current regulatory framework doesn't allow utilities to do."
One approach is mandating price breaks for consumers with good conservation habits, according to Perry Wong, director of regional economics for the Milken Institute, a Santa Monica, Calif.-based economic think tank. Such a move would motivate residents to use smart-grid tools, which would motivate utilities to provide these tools, he said. The resulting drop in power consumption could reduce the need for costly new power-generation plants.
"You have to place a carrot in front of both the power operator and the household, so we need a policy that can entice both," Wong said.
He also thinks regulations need to encourage businesses and citizens to install renewable energy generators, like solar panels, and sell the excess power to the grid. A fast-growing crop of renewable energy sources among citizens would motivate utilities to connect to those sources with smart grids and buy the power, Wong said.
Power from these sources could save utilities from building new plants, which would be costlier than converting to smart grids and buying power from citizens. To motivate citizens to contribute renewable energy to the grid, however, regulations must stipulate a pricing structure for such transactions, Wong said. Without these regulations, citizens don't know how much they can earn from selling renewable energy back to utilities.
One more obstacle to renewable energy needs to disappear, added Wong. Many areas have zoning laws that make it tough to build renewable energy plants. Streamlining federal and state regulations would make building the facilities easier and less expensive.