Tuesday, October 27, 2015

How Scary The World Would Be Without Standards

This is a guest post by Smart Grid Consumer Collaborative's Standards Committee

It’s the last gas station for sixty miles, you go inside to inquire about the fuel type for your vehicle.  Is it available? The attendant says vehicles in this region use 80 unleaded or diesel; you need 93!  The only hotel around looks practically abandoned.  Nightfall is approaching fast…

A sudden crash in the middle of the night shakes you from your sleep.  You hear footsteps.  You reach for your phone and realize you fell asleep without plugging it in. You plug your cell phone into the outlet. But, before you can react fast enough, you realize you’ve plugged your cord into the wrong outlet and the voltage is too high, damaging the only contact you have to the outside world. Heavy footsteps are coming closer towards your room…

The lineman is ready to reconnect the distribution line to the pole. He asks his partner if anyone has an interconnected distribution system in the neighborhood.  “Negative”, his partner responds.  The lineman connects the line and is immediately zapped, falling lifeless to the ground.  His partner screams out as he runs to his side. A customer recently placed solar panels on his home and did not notify his utility. “Why?” he had said, when questioned by his wife. “It’s not like I’m required by law…”

A world without standards can be even more frightening than any haunted house or scary movie. Standards are what allow us to go to any gas station and expect to fill up our cars, give us the ability to plug in a device without thinking about what outlet we’re using, and also prevents countless injuries each and every day. Without them, we surely would not be where we are as a society today.

There are a variety of standards for just about everything you encounter in life: vehicle standards, labeling standards, food standards; all designed to make things easier as we navigate our daily tasks.  Utility standards also play a part in our communities. In our last blog, we discussed the importance of developing and maintaining standards on smart inverters, a device used to convert the electric current flowing in your home from DC to AC.

In addition to these AC/DC bylaws, there are many other electrical standards that people encounter every day unbeknownst to the average person. For example, 46 states have already adopted the National Electric Code, a regionally adoptable standard for the safe installation of electrical wiring and equipment while the ANSI C.12 standard, developed by the National Electrical Manufacturing Association, is widely implemented by many utility companies to ensure the accuracy of electrical meters and thus, the accuracy of your electric bill.

As our grid continues to evolve, how will standards impact the next generation of electric delivery and reliability? Everyday more smart devices and distributed sources of generation are connected to the grid. Soon, the electrical grid will emerge as a resemblance of the Internet, connecting consumers and devices to everything they need in their daily lives. While rarely discussed, standards are crucial to keeping this connectivity and technology up and running.

Several standards have been introduced and, in some cases, implemented since the expansion of the smart grid. As our country is investing more than $400 billion into modernizing the electrical grid, some states have already begun to develop the next generation of standards. The Smart Grid Interoperability Panel is spearheading these efforts by maintaining a catalog of these standards on their website. These standards govern activities such as the secure exchange of data from the meter to the utility, and the appropriate electric connector that should be used for establishing a safe connection between a plug-in electric vehicle and a charging station.

Leading efforts to listen to and understand residential consumer interest in energy and utilities, Smart Grid Consumer Collaborative also maintains a guidebook of Consumer Standards housed on our website. 

Standards ensure that you don’t have to think about whether the fuel pump will fit in the gas tank, or that the octane will work with your engine, or that the plug for your phone or electric vehicle will fit, or that you have to worry about the voltage of electricity coming out of the outlet, or that your laptop or mobile device will connect to a WiFi signal- eliminating these variables smooth the transition through technologies, and help eliminate customer risks and concerns.  Without these standards, we would have many different plugs, adapters, and wires that don’t work with each other: truly a nightmare scenario.

Friday, October 23, 2015

The Strategy of the Consumer

This is a guest post by Nathan Shannon, Deputy Director of SGCC.

CenterPoint Energy has long been known as a leader in the energy industry in regards to customer engagement and satisfaction. They know that customer expectations are constantly evolving and in the past few years a new wave of engaged consumers have emerged within the market. Giving these consumers what they want is the number one priority of the Customer Experience team at CenterPoint Energy.

Last month at the Smart Grid Consumer Collaborative 2015 Members Meeting & Interactive Workshop in Houston Gregg Knight, CenterPoint Energy’s Chief Customer Officer, gave an insightful glimpse into the strategy of the consumer according to CenterPoint. He spoke on how we have moved from the “electro-mechanical era” to the “digital era” and now to the “convergence era.” Today’s consumer has a desire to be valued by their energy provider. They want their time, their money and their preferences to be given weight and importance.

Knight talked about the primary attributes consumers want from their energy provider. First, they want proactive outage notifications via text, phone or web. Being aware of an outage and how long it will last is a key benefit of a modern grid. This empowers consumer by giving them the information in real time. Secondly, they want low-effort interactions. A simple pay-bill reminder or an email about a new program offered gives consumers the opportunity to interact with their utility with ease. Ease-of-use raises satisfaction and gives the consumer the option to be as engaged as they would like. Lastly, consumers desire a clear channel of communication. They want to know what the utility knows when the utility knows it. Transparency is the name of the game. Customers trust their utilities and they want to know that they are well informed at all times.

SGCC’s Motivations and Emotions of Engaged Consumers research key finding echoes Knight’s approach and goes one step further: highly-engaged consumers tend to cite more internal and/or future-oriented motivations for both their overall engagement and specific purchase/participation behavior. These motivations include providing for future generations and caring for the environment.

In contrast, low-engagement consumers tend to be more motivated by immediate present-oriented things like saving money, convenience, and control. So while messages about environmental savings and even financial savings are sure to be received positively, it is the practicality, affordability, and simplicity of these messages that will be critical to getting this group of consumers to try new and existing energy programs. This ties directly into Knight’s attributes that consumers want to low-effort interactions and ease of use when it comes to communicating with their utility.

CenterPoint Energy has developed a customer experience that is personalized and empowers each of their five and a half million customers.  Delivering a consistent and simple message through all forms of customer communication has helped them to achieve this goal. Many other providers in the energy world are using these same steps to show their customers just how innovative and engaging the smart grid can be. With the growth of a modern grid well underway the energy industry is poised to deliver the highest quality consumer satisfaction this industry has ever seen.

To learn more about SGCC’s consumer research and education join us at our 2016 Consumer Symposium: The Connected Consumer and the Future of the Grid.

Wednesday, October 21, 2015

A Conversation on Net Metering, Energy Storage and Stakeholders

As a smarter grid evolves through the introduction of new technologies, we’re seeing differences arise over potentially unintended consequences.

I’m referring here to the rapid rise in consumer adoption of rooftop solar panels, driven by a drop in cost and the promise of lower utility bills and reduced greenhouse gas emissions. This trend is accompanied by the increasing availability of energy storage technologies and strategies. One of the resulting issues is the emerging division among stakeholders.

Consumers who adopt rooftop solar power argue that they’re contributing major benefits to the grid and to society by reducing demand and overall use of centralized, greenhouse gas-producing power. These consumers argue that reducing peak load helps a utility’s load shaping efforts and allows a utility to defer capital investment in peak-power plants. This position holds that the benefits outweigh the cost to utilities of accommodating distributed generation.

In contrast, some utilities are arguing that managing distributed generation costs more than its claimed benefits. As a result, the utility and customers who don’t adopt rooftop solar because they cannot afford it are subsidizing solar power adopters. Consequently, some utilities are seeking to adopt monthly charges or other means to accommodate rooftop solar installations. An associated issue is how net metering – a policy that credits customers for electricity they return to the grid against the power they use – is structured and whether it exacerbates the purported inequities described above.  

Thus, SGCC’s recent webinar on the topic, “Energy Storage and Net Metering,” featured a distinguished panel representing diverse views on these issues.

Jon Wellinghoff, former chairman of the Federal Energy Regulatory Commission, currently a Partner in the Stoel Rives law firm, essentially argued that the system and societal benefits of rooftop solar adoption outweigh its costs to a utility. Barbara Lockwood, General Manager of Regulatory Policy Compliance at Arizona Public Service (APS), countered that when costs and benefits are fairly weighed, utilities need to recover the cost to serve customers who adopt rooftop solar. Dan Vogler, founder and CEO of UtiliCell Energy Storage Systems, provided a technologist’s view of how storage can perhaps render the foregoing arguments moot by providing flexibility to both the utility-centric grid and to consumers seeking alternatives.

Wellinghoff argued that all means by which utility customers reduce demand should be treated equally, whether that is the adoption of more energy efficient appliances or sending a child off to college. He acknowledged that, under many regulatory schemes, consumer reduction in energy use erodes utility revenue. Wellinghoff implied that this effect should be dealt with through a regulatory scheme that rewards utilities for energy efficiency as well as volumetric sales, but not by penalizing rooftop solar adopters through demand charges.

Wellinghoff cited a meta-data analysis of 11 studies on the issue by Environment America Research and Policy Center, which found a net benefit to utilities from rooftop solar adoption. The study determined a value of $0.17 per kilowatt hour (kWh), well above the national, average retail rate of $0.12/kWh.

“Ultimately, when we talk about net metering, we’re providing a proxy for the value of [rooftop solar] to the grid,” Wellinghoff said.

Wellinghoff suggested that charging customers for rooftop solar adoption is “arbitrary and discriminatory” and that a net metering backlash from utilities will drive consumers to adopt energy storage technologies and to move away from the grid – the “least desirable outcome,” he said, due to the societal value of a centralized grid.

Lockwood in turn argued that most of the “cost of service” born by utilities is infrastructure based, though utilities price electricity consumed by customers on a volumetric basis. She argued that demand charges – applied mostly to commercial and industrial customers at this point – can align cost drivers and rates. She said she agreed with Wellinghoff that “aligning cost drivers and rates will unlock technology innovation for everyone’s benefit.”

However, Lockwood argued, the “cost to serve” and “value” are not the same thing and discussions of rooftop solar adoption and net metering do not fairly assess the cost to a utility to accommodate rooftop solar. The study cited by Wellinghoff, Lockwood argued, is based on “value,” not “cost to serve.” Demand charges to accommodate customers who adopt rooftop solar will help utilities recover the necessary infrastructure costs driven by that adoption, she said.

Lockwood also said that APS provides many options for its customers to adopt solar power in a way that includes the “cost of service” and that the utility provides customers with time-of-use pricing that assists in load shaping and cutting peaks, achieving the benefits claimed by rooftop solar and net metering advocates.

Vogler, our third panelist, sees current and nascent technology as an opportunity to finesse the net metering debate, though he pointed out that such policies support the business model for distributed generation.

Vogler extrapolated, explaining how rooftop solar, energy storage, electric vehicles (EV) and the grid could interact to benefit both utility and customer. Digital technology today could provide the means for a three-meter scenario that decouples a customer’s kilowatt-hour consumption at home from the customer’s EV-charging demand, as well as any electricity injected from home to grid, from vehicle to home or vehicle to grid. Using an EV battery as a mobile storage technology provides further flexibility to both consumer and utility, he suggested. He called that “carbitrage.”

Vogler’s presentation reminded me that technology, economics and fairness for all stakeholders in the net metering and energy storage debate is a highly complex matter. The value of electricity consumed and/or produced – at least in a single, local utility service area – has been based on the time of day that each occurs, and the application of energy storage is upending that traditional fact. De-regulated markets such as Texas, which now allow EV owners visibility into the price of wholesale electricity for EV charging purposes, adds another element of complexity.

Clearly these associated issues are now coming to the fore and will be argued at length in traditional public utility commission (PUC) hearings, which require utilities to present their case for cost recovery and require PUCs to weigh that against the public interest.

Industry stakeholders also are debating the net metering issue in energy-related media via essays, blogs, webinars and conferences – not just at PUC hearings. I invite everyone to join us for the SGCC’s 6th Annual Consumer Symposium: The Connected Consumer & the Future of the Grid. The Symposium is one of the industry’s premier events in consumer engagement with smart grid. Co-located with DistribuTECH 2016, the Symposium will feature two panels on the net metering issue.

Thursday, October 1, 2015

Consumers and Standards: A Crucial Relationship

Having listened to three knowledgeable panelists on our recent webinar, “The Importance of Consumer Standards,” I would like to share a few thoughts on the topic and weave in key points from the panel.

Consumers and standards are a necessary pairing, but – like much in the smart grid domain – consumers should not have to know much about standards to enjoy their benefits. My primary takeaway from our panel is that consumers will need affordable, easy-to-use, secure and reliable devices and services to manage their energy use and achieve their expressed goal of supporting clean, affordable energy.

Technical standards, of course, form the foundation for attractive devices and services. And if energy stakeholders collaborate on technical standards, then consumers need not know much about the minutiae of how standards are developed and incorporated into products and services, as long as they create value for the consumer.

In that sense, consumers need only know that a) standards should be supported because they create economies of scale and, thus, affordability, b) standards create interoperability and, thus, compatibility among devices, and c) standards ensure safety and reliability.

In turn, standards “need” consumers to ensure that the technologies being developed really serve a need for end-users. Typically, product manufacturers represent consumers in this scenario. If this is accomplished in a way that creates consumer value, that will accelerate consumer engagement, to everyone’s benefit.

All of this requires heavy lifting in the standards arena. And “getting it right” is crucial to the success of smart grid and transactive energy markets. Readers will recall that two of the world’s most advanced technology companies rolled out home energy management software offerings about five years ago and those offerings soon vanished. Many stakeholders are rightfully concerned that false starts could dampen general consumer interest in a smarter energy future. We’ve all got a stake in getting it right. And standards are the foundation.

That’s a long introduction to our panelists and their points, but I wanted to connect a few dots in my own mind after hearing them speak. Our three panelists presented different angles on the role of standards in the smart grid domain.

Bill Ash, Strategic Technology Program Director at the IEEE Standards Association (IEEE-SA), defined standards and the open process in which they are developed.

“Standards are published documents that establish specifications and procedures designed to maximize the reliability of the materials, products, methods, and/or services people use every day,” he said. “Standards address a range of issues, including but not limited to various protocols to help maximize product functionality and compatibility, facilitate interoperability and support consumer safety and public health.”

Ash had an enlightening infographic – see slide 16 in the webinar slide deck – that showed how standards underlie home energy management networks, how they connect a smart home or building with smart grid and support other purposes, such as electric vehicle charging.

Jeff Gooding, IT Enterprise Architecture Manager, Southern California Edison (SCE), pointed out that standards are required to integrate customer energy systems with a smart grid in a way that ensures the security of data exchanges and safe, reliable interconnections with distributed energy resources.

Gooding added another point consumers need to know about standards: they form the platform for innovation around attractive consumer products and services, which will promote engagement and mutual success between energy providers and consumers.

In terms of lessons learned by SCE, Gooding said that the timeframe for a utility rollout of advanced infrastructure unfortunately often does not match up with the rapid cycle of consumer adoption of related technology in the home. These two value streams need to be better aligned for mutual value creation, Gooding said. Thus, utilities need to be flexible and adopt standards that will support multiple consumer technologies to enable customer choice and demand.

Erich Gunther, Chairman, Chief Technical Officer and co-founder of EnerNex, spoke in his role as Vice-Chairman of the Smart Grid Interoperability Panel (SGIP), whose mission is to “securely accelerate and advance grid modernization through interoperability.”

Gunther gave numerous examples of how standards support, for instance, utility-consumer energy data exchanges. The most telling example was his description of the diversity of participating offices and organizations involved in the creation of the Green Button initiative. As you know, Green Button provides consumers with access to their own energy use data and the opt-in ability to provide that data to third parties for value creation. The White House, the U.S. Department of Energy, the National Institute of Standards and Technology, and myriad legislators, regulators and innovators worked to make Green Button “an overnight success, years in the making,” Gunther said.

Gunther’s phrase really captures the painstaking standards process so crucial for the value that consumers must have to participate in an interactive energy ecosystem. That is, if we do a good job working together on standards so that consumers find it easy and attractive to engage with our collective energy future.

SGCC will continue to work to engage and inform industry stakeholders on consumer standards. Please let us know what else you think we can do. Beyond our recent webinar on the topic, please visit our standards webpage, where you will find a list of consumer standards as well as the first of three blogs on the topic, not counting this one.