This article is music to my ears. I have posted two blogs on the EnergyCentral Blogs page this week that mirrors much of what your article is saying, titles reprinted below. I especially like the phrase "customers are much more concerned about saving money than taking actions that may benefit the environment."

The problem with our utility industry boils down to direction from regulators and to how they will fund everything given they are forced to recover costs through approved rate increases for all customers. This prevents our utility industry from tapping into the purchasing power of consumers who are willing to pay for new technologies that might just save them money.

It's up to regulators and the powers that be to do something progressive for a change.

Please read on the EnergyCentral Blogs page…

“Commercialization of AMI and Smart Grid Systems” Feb. 4, 2009.

…and…

“Commercializing Real-Time In-Home Energy Displays” Feb. 2, 2009.

Bob Amorosi, M.Eng., Resident of Ontario Canada

I'm sure we ALL would PREFER to not have to worry about making more informed decisions about energy uses, or spending hours a day doing it to save a paltry $25 a month, or not get out of bed during the night to look at the off-peak price. I'm sure we ALL would PREFER to not have to worry about gasoline prices, and not have to go out of our way to save a paltry $1.50 to fill up our gas tanks, or wait days to buy food at the local grocery store when certain items go on sale.

In case you haven't noticed, most consumers today DO worry about such things, and DO put much effort into them in spite of their preferences not to.

What planet are you from anyway? No one in their right mind would be stupid enough to set an expensive energy management system in their homes for hundreds of dollars and then expect to MANUALLY run it. We have computer chips nowadays in just about every consumer product you can think of that costs literally pennies, that can use SOFTWARE AUTOMATION to do all this. Furthermore It would respond almost instantly to fluctuating energy prices in real time too because in case you didn't notice computer chips are much faster than humans. Not only does one not have to manually do much if anything, but it won’t cost hundreds of dollars either if it were commercialized to the masses in large numbers.

Case in point. In a fully automated home management system, if say I want to do a load of laundry, one could simply fill up their machine with the dirty laundry, press a button on the home's energy management system telling it to run the machine during the next 12 or 24 hours. Then let the management system decide automatically when to turn the machine on based on real-time or off-peak prices. Sounds to me like it would take seconds to run each time a load of laundry needs washing provided the system it is set up and is designed properly.

Also, when Time-Of-Use (TOU) rates are implemented, they may very well be fixed every day for months at a time, but I submit this won't last long. The designers of TOU AMI systems have already made provisions for "critical peak" pricing, where during emergencies on the grid when there is a critical shortage of peak power, a utility will be able to override the established TOU rate and temporarily boost them to a critical peak price for hours at a time, even while you are at work during the day and are unable to rush home and switch off your power-hungry air conditioner. But an automated energy management system would simply do it for you when the price spiked, even without you knowing it happens while you're at work. A really good system design will even log these events and report them to the home owner on their PC, or perhaps even call them on their cell phone if they prefer to alert them it's happening.

My whole point is that we will surely face rising energy rates over time, and having more automated technology in one’s home that communicates with real-time energy prices will be the ONLY way to mitigate and reduce the hit on consumers' pocket books.

"But I do not want to stay up to 3 AM to see what the real time off peak price is. If that is a requirement I and many others are not going to be interested. " -- Perhaps if you gave up on the old analog instruments and considered current digital technology, you could see why that position is, shall I say, a lot more misleading to mass consumers than anything any proponent of smart real-time markets has said.

Finally, your "two rate TOU metering" ideal has a long list of crippling weaknesses. Most prominently, 1) it requires the price-setting regulators to now become prescient about the future. How much will customers react to the peak rate next year? What price differential do we need to set in order to keep all our baseload nuclear operating? What will the gas spark spread be? etc. etc. etc. Impossible to do other than badly. 2) It makes no provision for the grid operator to "purchase emergency load-sheds" in event of an unexpected event, meaning the ISO is still stuck buying (and the customer paying for) 10% to 15% hot and quick standby. A smart market could avoid that by providing real proof of a customer providing "negawatts" in such an event. 3) PHEV-EV autos. A genuine smart metering / mrket system culd make these a benefit to the grid instead of a curse. 4) etc. etc.

TOU pricing will surely change as time goes on when regulators discover the price differentials must be dramatically adjusted to get any significant load shifting effects they want. Even more sneaky, TOU rates will enable regulators to adjust them to squeeze more money out of consumers without most consumers realizing it is happening. The reason for the latter is most consumers will not be able to accurately measure their usage electronically in detail without the technology we’re talking about. When peak prices are moved higher by regulators, consumers may likely be told it is not really a money grab if only we move more of our usage to off-peak. But with decent software on a PC tied into records of past usage in a home automation system, consumers could actually experiment with “what-if” scenarios of their own usage changes.

It’s nice to dream of what’s possible. Perhaps we need to find a way to educate consumers to what’s possible and maybe the public can put political pressure on the powers that be to enable it.

Smart consumers will eventually realize that real-time rates will ultimately be the only way to properly handle PHEVs, and regulators will have to deal through our politicians with the rising numbers of irate consumers who want to exploit the benefits of real-time prices.

Customers want power when the want it and expect service from EVERY company they deal with. Demand management seeks to force behavioral changes on the customers to serve, ultimately, the aspirations of the environmentalists. The latter want us ot use less electricity and to have a bigger share of that from politically correct, but unreliable and expensive sources like wind and solar.

I also questtion the assumption that future electric generation needs be much more expensive than today's. The answer is obviously a big expansion in nuclear power generation capacity.

For an example of the public's reaction to demand management, consider the public's violent reaction to proposals by the California Energy Commission to require remote controlled thermostats in homes and businesses. The world-wide reaction was so negative that the CEC withdrew it within two weeks.

http://www.americanthinker.com/2008/01/who_will_control_your_thermost.html

http://www.nytimes.com/2008/01/11/us/11control.html?pagewanted=all

Even the Democrat-controlled California legislature saw the light and tried to make them at least voluntary:

https://www.istockanalyst.com/article/viewiStockNews/articleid/2645448

I note that the "Porkulus" bill includes billions for "Smart Grids" - wait until Americans' understand what that means - Big Brother invades one's home.

"Demand management seeks to force behavioral changes on the customers to serve, ultimately, the aspirations of the environmentalists"

This is a crock. Demand management does indeed seek to force behavioral changes on customers, but it serves utility companies, not environmentalists. In case you haven't noticed, utility companies, in their efforts to maintain reliable supply, have a crisis on their hands when there is a peak demand shortage. Their ONLY solution is through demand responses to shed loads, at least until they can get regulatory approvals to build more generation capacity to handle ever growing total demand.

What we are discussing here in this article is the ability of technology to change consumers’ usage habits of electricity to mitigate the hits on their pocket books, because whether you and most other consumers like it or not, increasing rates down the road will be forced down our throats. Now for stubborn people like yourself who REFUSE to change their usage habits, you have nothing to worry about because you will be still free to do nothing different. You will simply have to pay more.

Now I know what you are going to say. Utility companies have been blocked from building the badly needed generation capacity for years by the environmentalists. This is true to a great extent, but even if all their regulatory road blocks were lifted this minute, it will take huge sums of money and time to get substantially more generation capacity added to the grids all over the continent. In the meantime Joseph, you had better start preparing for rising rates down the road to pay for it all, and prepare for shortages in many parts of the US as early as this summer, when your lights won't necessarily be kept on all the time... even if you insist they stay on.

On the contrary, what Len Gould and I have been promoting time and time again on this website forum is that all demand responses and in-home technologies that interface to electricity prices should be voluntarily chosen to be used by consumers who are willing to pay for the technology. Consumers who are not willing to buy it simply do nothing and pay higher energy bills instead, where this is much fairer because big brother won't be intruding into homes against a homeowner’s will.

As I read the article that we are commenting on, "Utility executives, being closer to the issues, and more knowledgeable about the systems required, also are beginning to express serious misgivings..."

The way I read it is that government is forcing utilities to do the dirty work of implementing fixes for ill-conceived public policy. Certainly, a utility could appreciate the power to match customer demands to their ability to deliver at fixed prices. It is another exercise in blame-shifting.

As to hopes about demand response to real-time pricing, I can't fault it in theory but in practice, the marginal utility of electric service will be much greater than any politically justifiable price increase. In other words, voluntary demand response from real time prices hasn't and won't work.

After all, one of the misleading selling points is that it will LOWER electric bills. For most people, that ain't gonna happen.

I will agree with you there has been bad public policy. Had utilities been allowed to be building more generators all along, and replacing grid infrastructure as it ages and nears end of life service, and paying for it with slowly increasing consumer rates in line with inflation all along, we wouldn't be in the mess we're in. I submit however that it remains to be seen that voluntary consumer demand responses to real-time pricing will actually work on a large scale.

I disagree that it hasn't worked before because some isolated pilot trials in some American utilities, using trials with in-home displays and real-time prices in small numbers of households, HAS shown that consumers will respond voluntarily to price changes PROVIDED the price changes are substantial enough. Furthermore, even with regulated fixed rates that we have always had, literally thousands of households in Ontario were equipped with a real-time in-home display by Hydro One, and they have repeatedly observed an average of 10% drop in total energy consumption over time on average. What hasn't been studied enough yet is exactly what behavioral changes actually take place to yield this consumption drop.

As to lowering electric bills, given rates are going to go up substantially in the near future anyway, everyone's bills are likely to go up regardless of whether they change their behavior. But with real-time prices and the in-home technology at one's disposal, a consumer's bill will ultimately experience less of an increase when compared with doing nothing.

I would like to make a bet on whether an average consumer's bill will go up or down but the rate structures and the confounding variables are so complicated that we would be able to settle our bet.

I've reviewed the methodology of some of these trials and some bias the results by the opt-in criteria. In other words, they recruit enthusiasts. Maybe some are legitmate and maybe some real-world households will reduce consumption, but I certainly don't expect MY household to respond as intended. I'm in the house YELLING and POINTING my finger at energy waste weekly to little effect. A little electronic box on the wall couldn't be more invasive but if it is, I won't have it.

About 12 years ago I had a survey done in a shopping mall where about 200 random people were asked if they would be willing to buy a real-time in-home display that could track their electric bill, costing less than $100. Roughly 120 or so said yes they would, partly as a means to verify their utility bill and keep the utility people honest. Years later in 2006 Hydro One offered free displays to about 50,000 northern Ontario residents who had conventional electromechanical service meters, to keep them happy since they will be last residents in Ontario to get smart electronic meters by the end of 2010 as mandated by the Ontario government. Last I heard around 30,000 took one, and it might likely have been more if Hydro One offered to deliver it to their door and install it (residents had to pick it up and install it themselves). This was after several other 500 home pilot studies had been done in Ontario, by Hydro One in the City of Brampton and by other utilities in other Canadian cities.

So it is pretty clear to me that a significant percentage of the population would be enthusiasts as you say. No one expects ALL consumers would want one, and I am not suggesting utilities force every consumer to use them. Just give all consumers the option to buy it.

Also, Demand Side management is not the sole option. There have been peaks as long as there has been generation. Historically power companies installed low cost combustion turbine based peakers to handle the peaks. Take the GE LM 6000 for around $15 million one can get 50 MW or $300/KW. Installed cost is closer to double that amount or $600/KW These little units add to reliability and are fairly efficient having a simple cycle heat rate around 9600. These machines and similar ones can go from off and cold to 50 MW in under ten minutes. Currently Nat Gas is around $5 lets double that to $10/mmbtu. Fuel cost would be $96/MW add $3 for VOM and a $7 cost of owner ship. The little machine makes $106 power or 11 cent/KW. Even with $20 Nat Gas is makes 20 cent/KW power even adding 5 cent/KW for the grid and utility it is 25 cent power. My 1300KW/month would cost $325 again this peaker only power fueled with $20 Nat Gas a five fold increase from current gas prices. This is a little over double my current bill but even saving 10% of this is only $35/month. FYI Nat Gas reserves and extractability has actually improved in the last couple of years due to horizontal boring techniques. All this is to make two points first of all peaking capacity is easy, and secondly one should be able to do the economics of power generation before deciding the best course to take. Even and absurdly high carbon tax $5/mmbtu would only bring coal to around 11 cent/KW that with the grid and utilities cut would be in 17 cent range and my electric bill would be $221. One would hope at some point the renewables could compete and have a moderating impact. Continued

One last thing Electric vehicles are still lacking the hybrids are the only real movers currently.

The real-time energy price should be what generators are paid regardless of the bidding and offering prices. If it is not, it should at least be close to and follow the wholesale market prices in real time. If as you say this will be unfair to some stakeholders no matter what formula is used to determine real-time prices, so what. How fair is the current fixed rate regulated prices consumers pay if for example by the end of the year generators have made huge excessive profits? Or if they have suffered large losses?

As for the economics (of building new generation versus demand side management), it is not purely the economics that will determine whether demand side management should be favored. There simply won't be enough generation capacity to meet peak demand growth over the next many years, even if construction of large numbers of new generators for example were started today. You're also forgetting the huge infrastructure refurbishments badly needed just to maintain the existing aging infrastructure! The only alternative will be more demand side management to prevent rolling blackouts or brownouts during peak periods in many areas.

My point is the total cost of more demand side management need not be borne by all ratepayers if all consumers are offered the option to use real-time prices and in-home technologies to automate their usage, and ultimately offered access to the generator source of their choice under a system like Len Gould's IMEUC market reform proposals. In this scenario only consumers who choose to participate bear the costs for demand side management, which they can recover by minimizing their energy bills as compared with their bills having not participated and done nothing.

As for electric vehicles, I believe hybrids will come with larger battery packs and charging capabilities from AC wall outlets in addition to the small gasoline engines inside them. If not, they won't have the driving range to make long trips feasible.

Lastly, a complete in-home automation system linked to utility energy prices in real time could very well cost $1000, depending on system design. But that’s today, I can promise you that if it became mass marketed, the cost would drop to a fraction of that. I know because I work in the electronics industry, and mass volume production makes costs drop like a stone, until they ultimately become commodity prices type of behavior.

As to "proving" that customers don't want invasive energy controls in their homes, we could sponsor polling by neutral marketing experts. So far, the only people willing to pay for such polls are those pushing demand management.

Ultimately, this needs to be decided at the ballot box. I think it is a very fruitful issue for a conservative candidate and I've been working to promote it into the the political sphere here in California as noted in the articles I linked too above.

As to nuclear market penetration. France did quite well with 80% nuclear even before massive exports. They have a lot of experience using nuclear power plants in the load following mode. I did a study of that experience when my former employer asked me to evaluate running our nukes in such a mode. Little things popped out - control rod mechanisms saw more wear - easily fixed with better guide materials. PWRs had to flush more reactor coolant at end of core life, increasing tritium releases but still within regulatory limits. Piddly stuff like that. I helped design and test special controls for an island-based BWR too.

It will take many years of feverish construction before we see much need to load-follow with nukes in the US. I'd think pebble beds might find a niche there.

The European Generation Mix -- Earnst & Young

The further issue can be seen from observing the time-of-day generation mix in Italy and Spain, where nuclear makes up a significant portion in off-peak periods. Presumeably French nuclear.

As I said, over (or even at) 50% nuclear capacity and you'll need smart load management, period. Add in PHEV's and any amount of unreliable renewables and the need becomes greater. I've seen it from projecting Ontario's plans to increase nuclear generation from 33% to 50%. If consumers were properly nformed of the issues regarding baseload mix, (without load management, it must be highly variable, eg. NOT nuclear), renewables additions, use of PHEV's, they SHOULD support smart metering out of self-interest.

I don't understand why you make the presumption that nuclear can't be over 50% without demand management. Nuclear power plants CAN and DO load follow. It might be there are more economical generation sources to meet demand fluctuations but that depends on the relative cost and availability of fuels and capital.

We've done all right for over 100 years without invasive demand management. What is changing?

What has changed is that total demand growth is outstripping total supply growth, threatening critical peak capacity shortfalls in the near future. This is due in part to bad public policy not allowing enough new generation to be built for the last few decades. Complicating this sad reality is that aging infrastructure will sap huge amounts of money just to keep grid capacity where it is now, let alone any growth. And correct me if I'm wrong, but existing nuclear plants are purposely not allowed to follow daily demand fluctuations, operated instead for constant baseload supply only, but why this is so is beyond my understanding of nuclear plant design.

IF some nuclear plants DO load follow, I'll bet their ramp-up or ramp-down rates are far slower than other generation sources. If so, perhaps this is why nuclear is preferrably operated for baseload.

Len's 50% figure probably comes from daily peak-to-valley ratios in typical 24-hour total demand curves (I think if you consider baseload as being below the valley levels at night).

http://www.ftj.agh.edu.pl/~cetnar/ABWR/Chapter11.pdf, on page 11-3

"In the 65% to100% power range, the power change rate capability is aproximately 1% per second using only re-circulation flow changes. Below 65%, the power change rate is approximately 2.5% per minute using control rod motions."

I've worked on such plants in Taiwan with automatic grid frequency control capability. An ABWR can also take a 40% step decrease in power without scram as a minimum. It is not difficult nor expensive (~$50 million) to build in the ability to take a net load rejection but few operators are interested in the US since there is no payback for the investment. The AP1000 and EPR should have similar capabilities.

Nuclear is a high fixed cost and low variable cost investment. Current designs are capable of grid frequency control on a technical basis. The only thing standing in the way is that other methods of load following are, as of now, cheaper.

I’m from before “automatic washing machines”, dryers of any kind, and synthetic detergents. It was a ringer washer with two or more “stationary tubs”, soap (fatty acid sodium salts), bleach and bluing, and clothes line. And Monday was wash day, none of this “couple loads a day business” and woe be unto a neighbor who burned trash or leaves on a Monday.

The term “wash and wear” had not been coined and we got good syndets only when we could ignore the German patents. (Vel was marvelous and Tide’s in, dirt’s out, jingles on the AM radio soap operas. Some have the same names today.)

Sheets were washed in virgin soapy very hot water. Both rinses were clean and soap free. As other things were washed the second rinse tube became the first rinse tube and the original first rinse tub discarded. Ch.E’s, that’s real counter-currency. The last thing to be washed might be some throw rugs – by now the wash water is grey and not very hot.

The washing machine was actually washing nearly all the time as wringing & rinsing could be done simultaneously. The operator had total control of the cycles, water changes, etc. and could do a great deal of laundry quite quickly as there was very little time spent waiting.

Yes, it was energy efficient and frugal.

Thanks for the washing hints. Some of us might benefit from them in the near future....

Even if nuclear is easily capable of load following in what you're saying in your last post, their huge construction costs are a major financial barrier to attracting large enough investment on a scale that would replace all other peaker plants. Even if construction started this moment on large numbers of new nuclear plants, they won't come on line fast enough to avoid the looming peak-demand supply disconnect in many areas of the US over the next few years. In spite of what is technically possible with nuclear, demand management is on every utility company's radar screen whether we like it or not.

So Joseph, brace yourself for more demand management interaction with your local utility company and its Smart Grid when it emerges. For residential customers, I expect we will still be given the option whether to participate, but if you don't participate you'll surely have to open your wallet wider to pay for the looming rate hikes down the road.

Your utility won't necessarily invade your particular home unless you voluntarily ELECT to let them by participating in demand management. My take on it is that for most utility companies in North America, you'll be perfectly free to opt out if you so choose.

I will admit however that if some utilities FORCE it upon consumers to participate, like we saw with the communicating thermostat fiasco a year ago in California, then certainly there will be MASSIVE political reaction.

The roll-out plan of regulators is the retarded part of all this. Anyone who has done any marketing knows the sensible thing is to penetrate the high value uses and users of a new technology first. A couple of decades from now Joseph's children will follow.

Large commercial customers are where the action should be today with real time pricing and energy management. Many have some sort of EMS and the cost of up grades is small per kWh that can be shifted or saved. But neither California nor Ontario has initiated pricing that would encourage this. That is the sad part of regulation. Prices that lie about the differences in costs. It is not even that important whether we start with real time prices or reasonably differentiated prices by true peak periods and other periods. What matters is getting started where the costs are low and the benefits large. Then EMS can move down through smaller commercial and finally to residential. Lessons learned about technology implementation and market response can accumulate along the way. So the politicians want to start with single family residential! Good marketing would never be so inverted. And Joseph might even be dead before EMS reached his house in a good marketing scenario. The new occupants with new appliances designed to respond to price signals they receive from the grid would be more responsive.

I believe Ontario is not really starting with residential customers, we have programs for industrial and commercial customers rolling out as I write this. They include demand response (DR) incentive rewards and some (may) have real-time pricing options. We also have a limited residential program called "Peak Saver" that rolled out over the last couple of years where utilities offer to install a government funded communicating thermostat in your home at no charge to the homeowner. They communicate through the pager network with the utility, not through an AMI network, and are under the utility's full control unless the homeowner opts out in advance for 30 day periods if they choose. The take up by consumers however has been a tiny percentage of the population, mainly because consumers don't want their homes environment controlled by big brother at all, viewing it as an invasion of privacy.

A substantial percentage of large industrial and commercial customers were signed up a long time ago for some sort of demand management program with their local utility company. So residential is the biggest untapped part of the grid for DR, and with AMI systems and TOU billing on the verge of implementation, it is ripe to start more residential DR programs. I suspect however utilities in the US will charge ahead with residential DR programs much faster than Ontario because the demand-supply disconnect crisis looming in some parts of the US is much worse than here.

Not exactly the recipe for the making of good and/or timely decisions.

Utility managers are pretty conservative for a darn good reason - their customers are conservative in that they don't really want a change in service - reliable electrical power when they need it. Remember, electricity is a critical infrastructure.

Mr. Gould,

In response to the remote controlled thermostat proposal by the California Energy Commission last January, the state legislature passed a bill to make participation voluntary on an opt-out basis. I had suggested that it be made opt-in only with signed customer approval. While the Democrat-controlled legislature passed the bill the governor vetoed it.

I had also pointed out that our electric rates are already manipulated for political purposes and are devoid of economic logic. The Public Utility Commission would be able to "make us an offer we couldn't refuse" by establishing punitive rates for those who did try to opt-out.

Further, the California Energy Commission writes applicance energy standards and intends to REQUIRE that major appliances sold in the state have demand management facilities built-in.

Therefore, in California at least, demand management for residential customers will be MANDATORY by force of law.

This will most certainly be a political issue in the next elections.

As to nuclear load follow. I've said all along that the issue is economic. But let me turn Len's question around - if a windmill spends only 25% of its time making electricity, how can that be economic?

I am shocked (pardon the joke) to hear that the California government is mandating all new major appliances sold there MUST have demand management facilities built-in. It certainly does smell of MANDATORY participation. But consider this for a moment.

California may get away with making the appliance manufacturers comply, but they won’t get all consumers to participate in practice, and here’s why.

First of all, I would like to know how all consumers can be forced to buy all new appliances. What about consumers who cannot afford new appliance purchases, or those who aren’t ready to do so because their late model ones are nowhere near their end-of-life yet? Is someone going to donate free appliances to them?

Secondly, in light of the first consideration above, the utility people want absolutely nothing to do whatsoever with keeping track of every house to know who has what and who doesn’t in their homes. Just think of the potential volume of data when it must include multiple appliances in every home.

Thirdly, even if a consumer buys such an appliance, their utility company's smart meter or AMI network or office system must communicate somehow with the added hardware in these appliances to make it work. What's to stop tech-savvy consumers from disabling the communications by removing or bypassing the added hardware?, or jamming their radio or power-line communications to prevent them from working? Are the legislators thinking of sending demand management police into everyone's homes to prevent this from happening and thus keep consumers honest?

California legislators must be on drugs or something to actually think mandatory consumer participation will work, it has to be voluntary or it will never work.

The state-wide radio command system would send out test signals that are recorded in the meter or thermostat memory. When the utility company truck drove by to "read" the meters remotely, they would also note the compliance with and response to the test signals.

Those meters where compliance was not demonstated could receive a visit from the a utility representative or from a building code inspector. The rules are codified in the California Building Code ((Title 24). Hence, the state would have the power to have your power disconnected for non-compliance, raise your rates, fine you, or even declare your home unfit for human habitation (condemnation) and forceably remove you.

God, I sound so paranoid when I write this but it is indeed part of the plans. Just do enough research on demand response and smart grids.

I will credit the Legislature with passing AB 1491 last session that would allow opt-out but Governor Schwartzenegger vetoed it.

If the intention really is to have the system become "mandatory" and "enforced" as you fear, then it is obviously not a good system and not something I would support, in addition to being a foolish initiative. All that is necessary is some simple financial incentives, whereby those such as yourself who do not wish to participate can choose to pay the legitimately higher rates which result from a lack of demand management. With IMEUC, both rates are determined simply by market economics.

One objection I've heard from a conservative politician is that real time pricing will shift more cost burden onto traditional households, especially those with a stay-at-home mother and a working father.

As we saw in the California deregulation experiment, any change risks major unintended consequences.

You have missed my point. Demand management is a backward way of attempting to get economic behavior when utility prices are non-economic in the first place. It is what economists call a second best alternative, though the way it has been done would more accurately be called third best, or last best. Pricing electricity based on marginal cost in the first place would change the capital stock on the customer side of the meter making it at least an order of magnitude more effective than bureaucratic demand management programs. Proper pricing encourages everyone to participate or pay a proper economic price for using so much power on peak.

The difference between the cost of service for 4AM and 4PM on a hot summer day is about an order of magnitude. I don't think commercial rates in Ontario have that sort of diurnal variation and I know California falls short by about half an order of magnitude. Officials in Ontario have told us they plan to have a minor differential in diurnal pricing with interval meters for residential service. California plans to have significant incentives to go with interval residential meters, but without significant price increases on peak. If you can make sense of that you have politicianitis, a disease that rots the brain.

But don't worry about us in California. The Mexican drug cartels will supply us with appliances that keep us warm and wash dishes when we need to if we insist on big brother laws. Alternately, local officials may enforce standards the way the CHP enforces speed limits. I was doing a mere 75 in a 65 zone this morning, so the CHP in my mirror was of no concern. After all I was doing less than the functional speed limit of 80 that prevails locally. Where PC prevails rules are made to be broken. So do we want substance of economic and environmentally friendly power, or PCness? Interval meters are worth their cost only if we can get significant changes in the pattern of demand. So current programs are just another high cost bit of PCness without economic or environmental substance.

The

I agree with you the regulators in Ontario are purposely planning only a modest factor of two ratio between on-peak and off-peak TOU rates once everyone here is on them in 2010. The reason is highly political, and stems from studies done on pilot deployments of interval meters. Residential customers with the interval meters were kept on flat rates but their TOU data from their meters were analyzed, and it was determined that by applying TOU rates with a ratio of around two was basically revenue neutral, meaning if the average customer in the study did absolutely nothing to load shift, their bills would stay approximately the same whether they had flat or TOU rates as such. There will be virtually no hit on consumers' pocket books initially, to pacify the public which is obviously political.

However since most average consumers wont have any real-time in-home display device, or take the time to analyze their soon-to-be more complex utility bills on TOU rates, most won't be able to track their usages to even know whether the TOU rates are revenue neutral. I believe our politicians are thus setting the public up for future large TOU rate increases beyond being revenue neutral, and they will probably even keep the on-to-off-peak ratio relatively low. Then anyone that whines will be told to simply load shift to off-peak times so they won't feel it as much.

This is one of a timely article by Warren Causey that fuels interesting debates. This particular article reinforces, once again ,arguments like that of the EWPC article "Anti-System utility" (please hit the link http://www.energyblogs.com/ewpc/index.cfm/2007/9/19/The-AntiSystem-Utility for an explanation), where the grid monopoly is taken as a shield to protect the profits of the enterprise. Such protection is now being eroded and fast, sending utilities an interest for change.

According to Mr. Steve Pullins, utilities are being push to the Edge and he "gives three options on the trend that innovations and investment 'are turning new companies into competitors for utility customer attention and dollars:'” See the EWPC article "Propelling the Power Industry to a Superior Solution Path" (http://www.energyblogs.com/ewpc/index.cfm/2009/2/15/Propelling-the-Power-Industry-to-a-Superior-Solution-Path )

By looking at the initial statement by Jerry "... I still think all this smart grid push is about selling software, doing consulting, and selling smart meters, advanced SCADA and its support infrastructure all at the ratepayers expense. Just like Enron it is about money. It is sad that no one seems to be looking for the truth only the facts and opinions to support their own self interest. If anyone does know the “Truth” it is hidden by the opacity of the lies and the sheer bulk of the misinformation being flung. The special interests like Warren Casey have been successful and the Smart Grid is coming luckily sanity is slowing the massive waste of capital down," it comes to mind the experience of the reengineering revolution, where more that 70 per cent of systems had big problems and many were later abandoned or never actually got to be operated at all.

That way, mistakes like the utility that invested in AMR technology that is now obsolete, would no go into the customer’s rate base. Please recall the EWPC article, also induced by Warren, “Let’s Avoid Many Expensive Fiascos” (http://www.energyblogs.com/ewpc/index.cfm/2008/8/26/Lets-Avoid-Many-Expensive-Fiascos ). It would be a risk born by those that are not up to the task. By having those systems developed without the monopolistic regulated business model, the development of competing business models is the way out for IOUs investors. This will transform the competitive environment into one just like the information and electronics industry.

Please take a look at those articles to be able to reply accordingly.

Thanks,

José Antonio

Hi there,

This is one of a timely article series by Warren Causey that fuels interesting debates. This particular article reinforces, once again, arguments like that of the EWPC article Anti-System utility" (please hit the red link for an explanation here and below), where the grid monopoly is taken as a shield to protect the profits of the enterprise. Such protection is now being eroded and fast, sending utilities an interest for change.

According to Mr. Steve Pullins, on work financed by DOE on the smart grid, utilities are being push to the Edge and he "gives three options on the trend that innovations and investment 'are turning new companies into competitors for utility customer attention and dollars:'” See the EWPC article Propelling the Power Industry to a Superior Solution Path.

By looking at the initial statement by Jerry "

... I still think all this smart grid push is about selling software, doing consulting, and selling smart meters, advanced SCADA and its support infrastructure all at the ratepayers expense. Just like Enron it is about money. It is sad that no one seems to be looking for the truth only the facts and opinions to support their own self interest. If anyone does know the “Truth” it is hidden by the opacity of the lies and the sheer bulk of the misinformation being flung. The special interests like Warren Casey have been successful and the Smart Grid is coming luckily sanity is slowing the massive waste of capital down, ...

... it comes to mind the experience of the reengineering revolution, where more that 70 per cent of systems had big problems and many were later abandoned or never actually got to be operated at all. That way, mistakes like the utility that invested in AMR technology that is now obsolete, would no go into the customer’s rate base.

IN that light, please recall the EWPC article Let’s Avoid Many Expensive Fiascos. It would be a risk born by those that are not up to the task. By having those systems developed without the monopolistic regulated business model, the development of competing business models is the way out for IOUs investors. This will transform the competitive environment into one just like the information and electronics industry.

Please take a look at those articles to be able to reply accordingly.

Thanks,

José Antonio

It is CURRENTLY the case that nuclear plants are base load - but why is the assumption made that this will always be the case. Most nuclear capacity was built or designed 25-30 years ago at least so basing the future on old generation technology seems odd to me - especially from people who advocate such advanced technology. New reactor designs can be designed to follow load (Pebble Bed Reactors for example) fully automatically with no operator action. I'd suggest you forget smart grid technology and put your money in smart generation technology. Same result for a fraction of the price.

BUT - you cannot control WIND or SOLAR - if I recall it is mother nature that calls the shots on both of these.

It is complete stupidity to base an electricity generation system on unreliable and uncontrollable sources of energy.

And as for the utility deciding when I am to use their product - well that is a VERY slippery slope. Perhaps I will be told when I can drive my car or when I can use the washroom due to water supply shortages. I am sure there are advocates out there who would really like that.

Malcolm

Be careful about your predictions regarding driving your car and using your toilets, they may come true someday.

So what if mother nature controls wind or solar, when they are available they usually are so for hours at a time. Smart technologies are viewed to enable consumers to use them when they are available, instead of buying power from the conventional generators on the grid. But you can relax because we will still need the grid and its large central generators for the times when solar and wind are not available and any temporary storage has been depleted. And if fossil fuels disappear in time, most of the grid's central generators will likely be nuclear.

Martin Rosenburg's "Say You Want A Revolution" blog on the EnergyCentral blogs page today quote;

US federal Emergency Economic Stabilization Act of 2008. "ITEM: $7,500 - $12,500 - the size of tax credits available for plug-in electric vehicles, from the same Act. HELLO! Any one doubt that plug-ins are on the way - BIG TIME."

Get ready Malcolm, the demands on the grid are going to skyrocket. Let's hope and pray we can manage the growing grid demand with Smart Grid technology, or alternatively build new generation fast enough to handle it all. Otherwise you can look forward to using your toilets in the dark when rolling blackouts hit us down the road at peak times.