Thursday, November 12, 2009

Smart Meter Increases "Suit" Pacific Gas and Electric

On November 16, 2006, at a lucky customer's home in Bakersfield, CA, PG&E launched its SmartMeter program, designed to alleviate costs for customers, costs for supporting the power grid, and the cost of generating so much energy in the area. Even the commissioners were optimistic, as reported in a PG&E press release:
"I am pleased to witness today the installation of the first smart meter for a PG&E customer," said Michael R. Peevey, president of the California Public Utilities Commission. "This technology will link the prices energy consumers pay to the costs of that energy in the wholesale market, empowering consumers with the information necessary to make sound energy choices. Research suggests that even modest levels of price sensitivity in the retail market can yield substantial benefits as customers decrease or shift their energy usage. These types of demand response programs are one of the best ways to meet the energy needs of California's growing population, as outlined in our Energy Action Plan."
It is hard to know exactly when the honeymoon ended, whether it was when reported on a customer who found his power usage had tripled during a six-hour blackout, or at the town meeting in Fresno on October 20th which quickly became a unanimous indictment of Smart Meter-ing, or now in November, as a class-action suit has been filed against PG&E, asserting a variety of mistakes and misrepresentations. For those of us who have spent a fair amount of time researching the potential for advances derived from Smart Metering, these developments are disconcerting.

From a security perspective, there are two very important areas of guidance to take from these developments, and from the likely continuing negative perception of Smart Metering in some areas.

Integrity and Availability of Data

As we wrote here, and as others opined elsewhere, there is likely an abundance of information about to flood utilities. Some have rejected, or at least resisted, the idea that anything like high volume sampling would happen, and that aggregated data would be the more probable artifacts that utilities would store for billing and management. This suit and the ongoing outcry for justification of higher bills are exactly the reason why more detailed and regular metering information will need to be gathered and stored.

See, it is likely that these bills are actually accurate. As the commissioner stated at the outset, "modest levels of price sensitivity in the retail market can yield substantial benefits". Ok, so maybe the hot tar and chicken feathers are not necessarily a benefit, but they highlight a new awareness on the part of the consumers. It is surprising that this message of usage and contention for power has not been better absorbed by the public. Take an average citizen. They use power, like everybody else, from 8-6. Enter the Smart Grid, and the smart meters. In an attempt to incent off-peak usage, and to compensate for the increased cost of peak generation, power is more expensive from 8-6, and so the average consumer's bill, if they do not change their behaviors, is going to be higher. The smart meter only becomes an engine of positive financial impact for consumers when they figure out ways in which to really alter their power use to advantage the off-hour charges.

Until that happens, expect that there will be continuing challenges to the veracity of the smart meter data, and continuing scrutiny of the systems that collect and store it. This equals what we described in earlier posts, a need for lots of data, lots of governance of that data, and good security from authenticating the user to authorizing the billing.

Actual Smart Meter Opponents

Any publicly-perceived inequitable grab for cash by a business or utility can spawn a grass-roots movement in opposition. Ignoring the more fringe folks who bring you the youtube videos of jack-booted thugs monitoring your hot-tub to charge you with profligate energy spending, there are others who are more credibly mobilizing around this issue. An example is San Francisco-based TURN (Toward Utility Rate Normalization). With a 35 year history in utility consumer advocacy and activism, the have a new focus on the perceived inequity of a smart metering infrastructure that saves costs for utilities (better management, less truck-rolls, easier disconnects) while increasing the actual bills for consumers.

With group action, and organized effort, there comes increasing visibility and controversy around the issues, and there are likely to be more critical assessments made of Smart Metering infrastructures. This will naturally splash as well onto the overall Smart Grid approach of which smart meters are such an important part. With any such increase in visibility and controversy, individuals outside the credible groups may well begin to conspire to take more aggressive action, potentially creating a new wave of "hacktivism", with the focus in this cycle being the Grid. This will change the nature of the threat to the Smart Grid enormously, making it much more likely to experience the types of attacks that more typically plague governmental and military infrastructures.

Some of the Solution is in the Data

Many of the same constituencies who are actively opposing the Smart Meter evolution are also very much interested and involved in the promotion of more efficient energy usage and more integration of alternative sources. It is now the responsibility of the utilities to educate their customers about the actual dynamics of power and power pricing, to help them to better understand the choices that they will need to make.

For those utilities who have not yet begun to alter the finances of their customers through higher peak pricing, there is a cautionary tale here. It seems that it might well be worth 3-6 months of reporting on usage, with simulated billing and recommendations for changes, prior to actually instituting those changes. It would better showcase the insight provided by Smart Metering, would provide a sense of empowerment for the users, and would certainly eliminate some of what seems to be a sense of blindsiding on the part of the consumer.

Image thanks to the whimsical stylings of Roger Wood

No comments: