By Stephanie N. Mehta
December 29, 2009

The smart grid’s greatest asset — real time information — remains largely unused

By Bob Lento, president of information management, Convergys

“You could save $5 if do your laundry at night.” That’s the way utility companies hope to entice millions of Americans to use smart meters, which will help people and energy companies reduce peak hour energy demand and the burden it has on their pocketbooks.

To me it feels like déjà vu. Not long ago cellular phone companies learned that “free nights and weekends” could transform peak demand for network bandwidth from waves to ripples. By leveling out capacity needs, telecommunications companies saved millions in infrastructure investments for meeting peak demand, while offering a deal customers love.

For electricity companies the motivation to follow in their footsteps is huge. Peak hours create more blackouts, larger infrastructure costs, and more expensive energy as in-efficient backup power plants are fired up. But for utilities the success of “free nights and weekends” is still elusive.

A California smart grid pilot decreased peak demand by 5%, which is a substantive achievement in reducing energy use, but very small in terms of the potential for reshaping when people use it. Unfortunately, utilities don’t have nearly as crisp a message as “free nights and weekends.”

Making energy easy

Factors like weather make energy demand particularly unpredictable, leading to complex rate schedules that not only change at different days and times of the week, but with the passing of seasons. Consumers need something accessible, understandable, and easy to digest if they are to incorporate something new into their daily routine. Having season-long rate schedules doesn’t help utilities much in preventing blackouts during heat-waves either.

Some consumers have recently raised issues that their meters may be inaccurate. An audit may determine if the meters are running fast, but the issue hints at another important reason for simplified billing – consumer trust.

While utilities can’t create a simple plan like “free nights and weekends,” a massive network of interconnected smart meters can enable something even better by capitalizing on the smart grid’s most powerful asset: real time information from every home, business, and industry.

Saving money and averting blackouts

Consumers will almost certainly do their laundry at night and save the $5, if they can watch their energy rates like a stock ticker on an online dashboard, get updates on Twitter, or receive text message on their cell phone when rates are low. With this information, it’s not hard for customers to realize where they can save money and the detail, timeliness, and accessibility of automated information will give consumers more confidence and electric companies fewer resource-intensive customer service calls.

By the summer of 2011, we could all be receiving text messages and IMs when the energy drain of millions of air-conditioners is about to cause a blackout. Then organizations and households can postpone things like scrap metal melting or laundry and dial down their air-conditioning and the blackout could be averted.

That’s the future we would like to work toward.

Lento heads up information management at Convergys, (CVG) a Cincinnati-based provider of relationship management resources and technology.

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