Two Stories About Integrated Utility Smart Grid Programs

Michael Giberson

Obviously the electric utility industry is very much in the experiment and learning phase (also known as “trial and error”) of the smart grid.  Two examples are provided by PG&E in California and Xcel in Colorado.  It is tempting to rush to judgment on the impossibility of an efficient, well-run, customer-centric smart grid project implemented by rate-regulated, vertically-integrated electric utilities.  I’ll resist that temptation for now, but in the meantime consumers ought to ensure that whatever their local regulated monopoly is doing for (to?) them on the smart grid front doesn’t impede their ability to benefit from the rapidly coming consumer-centric smart grid future.

To that end, consider Toby Considine’s remarks in “Punch and Judy and Energy Usage“:

The real contest is over control of the customer interface, and thereby of the customer. Today’s Google Energy and Microsoft Hohm pose no threats to the control of the customer by the utility. The utilities still can gate access to the back-end energy markets. Control of energy information prevents both intermediation and disintermediation in the energy market. Utilities also are desperate to justify their AMI investments at a time when many are calling for moratoriums and delays in deployment; AMI is part of a seamless model that includes control of the customer’s home as well as of access to information.

[…] The challenge for today is to ensure both backward compatibility with OpenADE and today’s infrastructure and forward compatibility with the unimagined future. That future will support disruptive business models as well as technologies. And that’s why the fights are so fierce over something that appears so simple.

A lot is skipped in the “[…]” so read the whole thing if you want to know more.  An important issue for consumers is that regulated utilities and their regulators do not do “disruptive business models” very well.

2 thoughts on “Two Stories About Integrated Utility Smart Grid Programs

  1. Mike,

    More generally, I don’t believe anyone but the disruptors do disruptive business models very well. However, regulated utilities have far less flexibility to respond to the disruption, since they are managed by a “committee of opposing forces”, consisting of the utility management, the regulatory commission and the consumer advocate.

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