Texas is becoming a recognized leader in smart grid development, and just wait, it is going to get better. One external bit of circumstantial evidence for this claim comes from a meeting last week at the White House hosted by Aneesh Chopra, Assistant to the President and Associate Director for Technology within the White House’s Office of Science & Technology Policy. When Chopra wanted to discuss the smart grid, he called on Texans: Barry Smitherman of the Public Utility Commission of Texas, Brewster McCracken of the Pecan Street Project in Austin, and representatives from Dallas-based Oncor, Houston-based CenterPoint Energy and Houston-based Reliant Energy. In addition, folks from Itron (Spokane, WA), Landis+Gyr (UK), and the Zigbee Alliance (San Ramon, CA) will be participating.
There are two sides to the smart grid world: the wires company-style improvements and the retail customer revolution. Things are happening in Texas on both sides. The wires company developments will come sooner, because it provides a foundation for the customer-side developments and because it is easier for incumbent utilities to understand and deploy. The retail customer revolution belongs to today’s innovators and explorers, who are likely not today’s well-established incumbents. The revolution will be slower, because in general consumers are reasonably happy with their power suppliers and don’t do much active shopping around. Eventually, however, it will be revolutionary.
Lots of places have rolled out smart meters, and utility smart grid investments are happening many places as well. But for the most part a smart meter tied to a customer on a cost-of-service regulated flat-rate tariff is like owning a smart phone connected to the Ma Bell monopoly of last century. There may be a certain cachet for gadget geeks in having such a thing, but otherwise it mostly just sits there.
Texas has, in the ERCOT-linked parts of the state, all of the pieces in place for a customer-driven revolution: the Texas competitive retail market, smart metering, a competitive wholesale market, and use of true interval meter data rather than load profiles to allocate wholesale costs to retailers. Consumers will better understand their use of electric power, that understanding will inform their energy choices, a competitive retail market place will allow creative retailers to work with customers to enhance their energy choices, the retailers will begin to engage the wholesale market differently, and the competitive wholesale market will adapt to the changing demands of power customers.
There is a lot of exciting engineering work happening, in Texas and elsewhere, but when it comes to a dynamic retail market that can make the most of that engineering work, Texas is the only place in the United States with a good foundation.