The utility-consumer relationship is primed for a fundamental overhaul. Armed with information, formerly passive consumers will take charge of their energy future, say a panel of experts convened by Climate One on January 13. Expect a wave of innovation, as far-thinking policy prepares the way for a cleaner, and more dynamic grid.
“A lot of the more forward-thinking utilities are starting to think about the ratepayer as a customer. That for them is a big innovation,” said Ted Howes, former Energy Lead at the design and innovation firm IDEO. “Now they have to fulfill that promise.”
Utilities are struggling, he said, to prepare for the complexity that comes with the new two-way relationship. “In the end, for the consumer, what are the additional benefits for them? How will it let them lead their lives differently? How much will they actually be willing to engage with their electricity? Oftentimes, [utilities] are taking it from a fundamentally technology-centered standpoint, not a human-centered standpoint,” he said.
Mark Duvall, Director of Electric Transportation and Energy Storage at the Electric Power Research Institute (EPRI), a utility think tank, agreed that the customer relationship must change, but emphasized the importance of the utility and the grid in a decentralized energy future in which many more consumers generate their own power.
“If you decide that you’re going to build a zero-net energy home, put a lot of solar energy on the home, that doesn’t mean you don’t need the electric grid. In fact, you could say you need it more,” he said. “It means you’re really buying availability and capability, rather than just paying for kilowatt-hours.”
Dian Grueneich, formerly a Commissioner with the California Public Utilities Commission (CPUC), added that the electrical utility sector will innovate much faster if nimble green tech start-ups are able to scale new technologies.
“So many people who had been involved in the IT industry discovered that there’s this world called energy, there’s this world called electricity. Trillions of dollars are flowing through this world,” she said. “There hasn’t been much innovation or technology change in 100 years. That tells you there is a business opportunity, to be sure.”
What we haven’t seen, she added, is for these technology innovators to master the arcane world of publicly-regulated utilities serving millions of customers. “You may have the best product in the world, but a state commission can kill your business plan overnight,” she said.
But even if you navigate the policy thicket and manage to bring the product to scale, the customer might not be waiting with open arms – as illustrated by blowback from the roll-out of wireless smart meters. “As it happens, the technology has worked pretty well, as expected certainly,” said Ted Howes. “But in terms of the roll-out, that was a missing piece. I think we could have sensitized consumers a little better.”
– Justin Gerdes
January 13, 2011
Photos by Ed Ritger
The Commonwealth Club of California