Friday, June 28, 2013

The “Surveillance State” and Smart Meters

By Patty Durand, executive director, SGCC

The recent revelations about the National Security Agency’s (NSA) surveillance of domestic communications made me cringe. While too many unanswered questions remain to draw firm conclusions, the impression that a government agency is monitoring Americans’ cell phone, email and Internet traffic could play right into the hands of smart meter critics.  That would be a leap in logic, in my view. And I’ll tell you why. But these developments also underscore why the engagement process resulting from our Smart Grid Consumer Pulse and Segmentation study is deserving of even greater support. I’ll share my thinking on that point as well.

The mass monitoring of electronic communications to find patterns of potential terrorist activity appears to have little relevance to personally identifiable, home energy use data. Yet the topic is worth exploring further, if only to better understand how smart meter data is collected, protected and analyzed by utilities.  However, legal and well-established security-related concerns trump interest in anyone’s personal home energy use.

The power sector already is concerned with hackers seeking to disrupt the grid as well as the reliability of the grid’s aging components.  Every U.S. industry has similar concerns with protecting their own assets and customers. For the power sector, the collection and analysis of home energy use in aggregate – i.e., patterns – helps manage the safety, security and efficiency of the grid. It would not be rational to forego that value out of fear that individual data would be misused.

Americans are already aware that life in a digital world involves trade-offs between convenience and privacy. That calls for discussion and debate of those trade-offs and might need to include whether the trade-offs apply to smart metering data. Living in a digital world and understanding and balancing these trade-offs would seem to require more robust engagement among the relevant parties, rather than indulge in fear and a search for bogeymen.  

While the constitutionality and legality of the NSA surveillance needs to be openly reviewed, let’s take a deep breath and consider whether this is a game changer for power utilities and their efforts to run the grid more efficiently and with a greater degree of environmental responsibility.

Smart meters are being implemented to provide:
  •   more accurate billing than aging electro-mechanical meters,   
  •  end-of-line sensors to provide insight into outages,
  • dynamic pricing that will reflect the true cost of electricity provision on 24-hour and seasonal bases,
  • data for the homeowner to better understand and manage their electricity usage.

Placed into context, the use of smart meters to enable more sophisticated energy use by the consumer and more efficient, sustainable grid-related practices by utilities makes at least as much sense as other technologies where the trade-offs between value and privacy are less clear.

That said, utilities and public utility commissions remain responsible for robust data privacy practices and policies with sufficient transparency to allay their customers’ concerns. The movement toward offering opt-out policies, with corresponding fees, is one step in that direction. An iron-clad policy that any personally identifiable information derived from smart metering is the sole property of the account holder is another step, which is already widely embraced.

We’re really at the beginning of important conversations about how to live in a digital world while retaining a sense of privacy.  Let’s recognize that’s where we are. The power industry and its customers have yet to grasp, fully explore and, perhaps, resolve related issues involving smart meters. The moment is ripe for engagement on the actual issues, to ensure safeguards and maintain confidence in the institutions that enable our digital lives, particularly the power sector that drives so much of modern life.  News of the NSA’s domestic surveillance of electronic communications should drive that engagement rather than plunge us into a murky world of pervasive paranoia. Many people have worked hard to assure consumers that their energy data is safe as always.  I want to avoid this news raising new concerns and more unfounded attacks by critics, but would welcome informed debate and transparency.  I hope that happens.

On a related note, the SGCC will soon unveil the results of several major initiatives that serve consumers and their engagement with the power sector.  We have a new fact sheet called Becoming a Smart Power User; we are launching a brand-new consumer-facing website which leverages our segmentation and educational research about how to engage and inform consumers; we are beginning two new pieces of research – an update on Smart Grid Consumer Pulse and Segmentation study (Wave 4) and one on the economic and environmental benefits of smart grid technology investments. And much more. Please stay tuned. 

Wednesday, June 5, 2013

Research-based facts over conventional wisdom

By Patty Durand, Executive Director, SGCC

As I travel around the country presenting the SGCC’s research findings, I’m running into other presenters who say things like, “All people want is to flick a switch and get power. That’s all they care about.” Or: “All people want is cheap electricity. They don’t care about the details.”

These dubious statements often are backed up by man-in-the-street video interviews in which the interviewer exposes the interviewees’ ignorance on smart grid concepts and terms, as if that were evidence of anything.

This frustrates me because those statements have no basis in fact and the ludicrous videos establish nothing, other than that power utilities have only just begun to educate their customers.

At best, these blanket statements are the product of “conventional wisdom,” an unexamined train of thought without supporting evidence. The speaker is simply imposing his or her own thinking on an issue deserving of careful analysis. At worst, these are self-serving statements designed to reach a foregone conclusion.

In contrast, the SGCC’s research reflects that the supposedly homogenous group, “people,” is composed of five distinct consumer segments, each with their own motivations and aspirations. Two of the five segments – Traditionals and Easy Street –prefer flat rates and want to pay their bill and be done with it, though they comprise a minority of the U.S. general population at 30%.

The other three segments – Concerned Greens, Young America, and Do-it-yourself & Save – show avid interest in energy issues. Several of these segments show interest in adopting energy practices that align with their personal outlooks.  And their numbers comprise 70% of the U.S. general population.

As it turns out, the American consumer is largely aware of the implications of electricity generation and consumption as they relate to the issues of our time. They may not yet understand the concepts, terminology or technical aspects of power or “smart grid,” and they cannot define what a kilowatt hour is, but they “get” the issues at stake. And many care a great deal.

So, SGCC research has exposed conventional wisdom for what it is: lazy projections of the speaker’s thinking that fall apart in light of bona fide research.

Even more insidious than lumping “people” into one homogenous group and dismissing their interest in understanding the implications of today’s grid is the implicit assumption that people don’t care and/or don’t wish to be educated. Another of the SGCC’s research-based findings is that there’s significant consumer interest, almost across the board, in learning about electricity provision and its implications. Environmental concerns are completely mainstream today, as are concerns about the nation’s energy posture.

Of course, consumers are concerned about the cost of electricity and its affordability. The recession we are just emerging from underscored that while electricity remains relatively inexpensive in this country, the electric bill – and the factors that govern it – is a significant expense for many. But to pretend that cheap, reliable electricity is everyone’s only concern is a fallacy.

As you know, the SGCC’s mission is to understand consumers’ motivations and aspirations in order to assist in educating them about their electricity use and the implications of various practices. Let’s begin by respecting the consumer.

If “conventional wisdom” has any basis in fact, that’s because consumers have for a century been treated as passive ratepayers. Utilities themselves acknowledge that their success in providing safe, affordable, reliable electricity has made it challenging to educate their customers now that grid modernization is underway and a utility-customer relationship is beneficial to both parties.

So, let’s supplant the unexamined mantras of conventional wisdom with actual research and use the latter as the basis for educating consumers on what they need to know to be savvy customers. At the very least, consumers will need to “get it” in order to support the tens of billions of dollars in grid improvements needed to keep their electricity reliable and affordable and enable them and the U.S. in general to remain competitive in the 21st century.  And the best case is an engaged and savvy consumer who works in partnership with their utility to manage their costs, address their values related to energy, and who enjoys the services and programs the utility has to offer.