Smart Grid 101

Did you know you’re getting new digital “smart meters” from PG&E? Instead of a meter-reader coming by to read those little dials, your smart meters will communicate wirelessly with PG&E. And instead of just a monthly bill, you’ll be able to monitor your energy usage hour-by-hour online.

Rather watch mildew grow? Understandable, but strange as it may seem, some of us energy geeks are truly amped about this new technology.

“I’m excited, and a lot of our staff is as well,” said Dana Boudreau, operations manager for the Redwood Coast Energy Authority — and such an energy geek that he is a step ahead of PG&E with a $250 device called The Energy Detective. “I have it hooked up to Google PowerMeter and can log on from anywhere and see what’s happening with my home energy usage.”

What really lights us up is not just managing our own consumption but envisioning the economic and environmental benefits of smart meters, which will enable two-way communication between energy consumers and the power grid.

Smart meters are step one in making the grid more responsive, flexible and intelligent, and this “smart grid” promises “[l]ower electricity bills, fewer new power plants and reduced emissions,” according to Public Utility Commissioner Nancy Ryan.

Most of us energy geeks aren’t as good as Ryan at communicating. We tend to say things like, “The real cost of energy should be more visible to consumers,” then realize that’s an “eat-your-spinach” approach. So we reach for something grander … then remember the last time we bored our friends trying to explain the role of dynamic pricing in integrating renewable energy.

PG&E suffers the same affliction, compounded by bad press.

Last year, hundreds of Bakersfield residents complained or sued PG&E, saying the new meters were overcharging. Tea Party members and environmental activists in Sonoma and Marin say they’ll refuse SmartMeters (the brand PG&E’s contractors are installing) because of privacy risks and the health effects of their electro-magnetic frequency (EMF). At the Journal‘s deadline, Tea Party members were organizing a presentation on the topic to the Fortuna City Council.

As for the lawsuit, a judge agreed that the PUC was the place to resolve the SmartMeter complaints. Soon after, an expert consultant reported to the commission that the Bakersfield SmartMeters worked fine. People’s bills went up for other reasons, like the fact that some of the old meters were under-reporting consumption. The report faulted PG&E for lousy communications, though. PG&E spokesman Paul Moreno told me that the utility has “taken the comments to heart,” improving outreach materials and website (pge.com/smartmeter), putting more staff to work in a SmartMeter call center and making more community presentations.

At a recent Arcata City Council meeting, Councilmember Shane Brinton quizzed a PG&E rep about hacking and privacy. He was told the devices were safe.

Smart grid expert Alexandra von Meier, professor of energy management at Sonoma State University, doesn’t take doesn’t take the privacy concern lightly. “If you get someone’s energy demand profile, you basically can tell the rhythm of their life,” she said. “A burglar could know what was the best time to break into your house.” (Or find out who has a really fat marijuana grow.)

Moreno told me PG&E has “a team in place that continuously monitors cyber-threats and is in touch with industry experts and federal authorities [on cybercrime].” A PUC spokesman said the commission will closely monitor PG&E’s cybersecurity practices and those of other California utilities.

If those promises don’t allay your fears, there still may not be any way out of getting a SmartMeter unless you can live without utility service from PG&E. PG&E is installing them because of state policies backed by legislation and PUC decisions.

Back to why us energy geeks are jazzed about SmartMeters. Let’s start with Ryan’s first two promises: lower electricity bills and fewer new power plants.

When Enron and other energy companies manipulated California electricity markets in 2000 and 2001, what gave them leverage was the fact that electrical generation must match electricity consumption instantaneously or really bad stuff will happen. The California Independent System Operator (CAISO) had to buy electricity at exorbitant rates or see its automatic controls shut down parts of the grid. When they couldn’t get enough power, rolling blackouts occurred.

The electricity market has since been tweaked to prevent Enron-type scams, but the physical law that generation must match demand still reigns. And to meet peak demands for air conditioning on the hottest afternoons of the year, CAISO has to call on inefficient and expensive gas-fired plants known as “peakers” that can throttle up quickly.

Depending on weather, they may run just one or two weeks a year. Imagine the cost of buying and maintaining an expensive low-mileage car just to drive it a few weeks a year.

We don’t use much AC on the coast, so why should we care? Because we’re in the same electricity market, and when PG&E has to buy that expensive power, it passes those costs on to us. We don’t notice because the regulated rates we pay “more or less flatten out those curves over time,” said Boudreau.

After SmartMeters are up and running, PG&E will start PUC-mandated “dynamic pricing,” charging us more for electricity during peak periods, when the grid is stressed by high demand, and giving rebates or price breaks when we use less during those periods. This is something the old dumb meters can’t accommodate.

At first, there will be voluntary programs with e-mail, text and phone alerts telling us that an opportunity to save is coming. By 2014, we’ll all be on some new form of dynamic pricing.

When the California grid uses fewer peakers, the PUC should act to pass the lower costs on to us. Rates might not actually go down — a lot depends on what happens with the price of natural gas, the main fuel for power generation — but we’ll pay less than we would without the smart grid. At least that’s the idea.

How will the smart grid reduce emissions? First, those peakers are inefficient — like a car that gets lousy gas mileage. When we reduce peak demand, we’ll reduce emissions.

The smart grid will also allow utilities to use more clean energy like that from solar and wind. PG&E is supposed to get 33 percent of its power from renewable resources by 2020 (if Gov. Schwarzenegger’s executive order holds). A big challenge to doing that is the fact that the sun doesn’t always shine and the wind doesn’t always blow — yet electricity demand must always be met watt-for-watt.

Now PG&E has 2 percent or 3 percent wind and solar on its grid, and it’s not a big deal to adjust to the randomness and variability. To integrate a lot more, new approaches will be needed.
 
The most readily available option is to build more of those inefficient peakers and have them ready to ramp up quickly when the wind dies down at a big wind power farm or clouds block the sun over an area with lots of solar panels.
 
But what makes more sense to us energy geeks is to have a bunch of consumers ready to reduce electric demand quickly — or shift it to times when there’s a lot of wind or solar power available.
 
SmartMeters and the smart grid make that possible. “It’s a way to integrate more intermittent renewable energy for lower cost,” said Jim Zoellick, an engineer at HSU’s Schatz Energy Center who is studying renewable energy options for the county.
 
There’s much more to the smart grid, including new appliances and electric vehicles with chips embedded to communicate with SmartMeters and operate or charge when electricity is cheapest — or maybe greenest. We energy geeks will be watching, and hoping you’ll pay attention, too.

This article appears in Holiday Gift Guide 2010.