This article brings up a very useful concept from the customer’s point of view. However in fact it is a very old concept since utility companies have been aware for over a decade that consumers would benefit by having access to detailed energy use information and energy costs on a daily basis rather than see a consolidated bill at the end of a billing period. It is more commonly known as real-time of near-real-time energy monitoring by the customer.

Smart meters are part of the technology to enable this given they inherently have the ability to track Time-Of-Use energy consumption, plus the ability to electronically communicate on demand the customer's current total energy consumption and instantaneous power demand readings. Most state-of-the-art smart meters being deployed in the US, or being pilot tested, have these capabilities. Customers however must also be provided new technology to access their meter data.

Some utility companies, including all of Ontario’s local distribution companies, are indeed planning to publish detailed energy usage data to customers typically by presenting hourly consumption data collected the day before on each customer’s secure web account. But this approach is flawed because customers will have a very difficult time recalling what the localized peaks or valleys in their past day’s usage patterns correlate to regarding specific energy use habits or appliances. This form of customer data feedback therefore will have limited usefulness other than perhaps to track one’s total energy bill on a daily basis.

There is technology available to communicate in real time directly to a smart meter, more commonly known as a real-time energy display device.

Alternatively a little more expensive approach available is to use display devices that communicate with the meter’s AMI network to indirectly access meter data.

The third and most expensive technology approach available is to use a computer or display device that communicates through the internet to a utility company and ultimately its AMI network and meter data.

Approaches that access an AMI network have other problems besides higher costs. A typical AMI network’s bandwidth and data latency limitations make real-time access unfeasible if large numbers of customers simultaneously attempt to access a local area AMI network. At best they can provide near real-time access. Furthermore, permitting customers access to a proprietary AMI network can be problematic for utility companies because of security issues.

Finally any of the above real-time or near-real-time technology approaches becomes very expensive to implement on large numbers of customers. The real problem is most or our utility companies are not prepared to bear the full cost of widely deploying it, nor are they prepared to force unpalatable rate increases on every customer to fund it unless forced to do so through regulation.

Bob Amorosi, M.Eng. Resident of Ontario Canada

Their studies have been conducted by equipping groups of literally hundreds of customers with a display device. Data revealed a wide variance in total energy consumption reductions with some customers having zero but others as high as 20 percent, with an overall average approaching 10 percent.

Consider the impact on conservation of energy if an entire population were equipped with such technology. A 10% sustained reduction in consumption compares with taking several large central generators off the grid completely.

The underlying reasons for these sustained energy conservation behaviors with customers is that their running energy bills are in their faces every day, and the display gradually enables learning their appliances' energy use costs combined with their own usage habits, ultimately enabling customers to make more wise energy use decisions. Consider too how important this will become under Time-Of-Use billing the new smart meters will introduce everywhere.

Alternatively if one must repeatedly log onto a utility company's website to view past energy usage and cost data, as is planned by many utility companies, the impact of the information on consumers will be far less than if customers were equipped with a real-time display sitting for example on their kitchen counter top or mounted on a wall similar to a thermostat.

I'm happy with my service as-is and have no interest in my utility collecting and storing additional information on my energy uses. The utility's interests stop at the meter.

Let's just keep this an arms-length business relationship, please.

I'm not a "stakehold", I'm a customer.

We all would like to see our service remain as-is but unfortunately it wont stay that way. The utility companies are all going to change to Time-Of-Use billing with smart meters whether we want them to or not, and collect hourly data. They will store it on their systems so they can determine your bill, and what ever else they do with the data will be out of our control.

In fact they intend to implement much more than simply TOU billing too. They are going to offer demand response programs to those customers who may be interested in load shedding on request, and if you happen to have a history of high peaks in your hourly usage habits, guess what, you will be discovered through your meter data profiles and will be a prime target to get to participate in demand responses.

Just wait until Plug-in-Hybrid-Electric-Vehicles appear in large numbers. The potential for crises in peak demands in some places are leading many to develop technology to force energy rationing on customers by dictating when you will be allowed to plug in to recharge.

Yes Joseph there is a potential for the story 1984 by George Orwell to become closer to reality unless consumers retain in total control over their energy uses and manage their own demand with technology, instead of the utility companies doing it for us.

While I can see real-time pricing of residential electric energy as a possible market innovation, the invasiveness of "smart grid" technology will be resisted on political grounds. Its benefits to the citizen has been overstated in an attempt to sell it.

I've been right about this before re remote control thermostats.

Most of the cheerleading for it is really little more than rent seeking.

Here in California we're seeing water shortages. Turns out they are from EPA mandates. From that, we are told here in San Jose to not water our lawns between 6 am and 7 pm.

Sorry, but I vote for politicians who will ensure that infrastructure is there to meet my needs. If they don't deliver, I will vote against them and give my support and vote to leaders who look to be more effective in serving my interests.

The "Smart Grid" is not about serving my interests. Far better to build the infrastructure we need.

You hit the main issue right on the head in building the infrastructure we "need".

Trouble is there is huge political opposition to opening consumers’ wallets or governments’ wallets to pay for building that infrastructure to meet future energy demand growth that is forecasted. Large rate increases are traditionally held back as much as possible by regulators for this and other reasons. The result today is what we are seeing - the selling of technology for time rationing and quantity rationing of electrical energy use, poised to be foisted on all of us in future to maintain the lights on without building so much infrastructure.

We only use extraordinary kw’s during very cold weather. Some winters we never have a single day of temperatures of zero or below. But about 20F and below the heat pump never stops and depending on wind and sun conditions the I^2R heating really spins the meter, and no meter however smart is going to help. We have had temperatures as low as minus 20F at which the COF of the heat pump is very low.

I could use a smarter thermostat. I do not set the temperature down and “coast” through the night because when the heat is turned on in the morning the thermostat thinks,” temperature below set point and turns on the resistance heating too.”

Seems to me a smart meter would hardy change my usage; no justification.

Bob, you went ahead and said it out loud: Rationing.

Just how much $ will this save the average residential customer?

The price of electricity at retail is about 75% fixed costs for transmission, distribution, and administration. Only the remaining 25% to 35% is the cost of generation. Say the difference in avoidable peak to average costs is 2:1.

That means that a diligent householder might be able to cut his costs by 10 to 15%.

If someone finds that his consumption patterns meet his needs already, his costs will INCREASE since the "smart meter" infrastructure will be added as another fixed cost. In fact, I bet he will be doubly screwed as other cost-shifting will occur.

Sorry, I just don't see a pay-off for the average citizen.

Leonardo Energy - The Global Community for Sustainable Energy Professionals

"According to the graph, the cost of distribution (not including generation, transmission or taxes) would be around 7 c/kWh for an average European family using 3,500 kWh. It would go up as high as 13 c/kWh for a demand of 2,000 kWh, i.e. a family investing in high efficiency appliances and lighting, and serving heating needs from non-electrical sources. For an all-electric passive house, with 2,000 kWh demand for appliances & lighting, and 3,000 kWh for heating, distribution costs would go down to 5 c/kWh.

However, in arguing for an IMEUC market, (smart metered, open market for generation) I am arguing for the LONG term, when ALL household energy use will come to you over the electrical grid. The "average" customer will see electricity substituting for N Gas space heating and water heaing (heat pumps), and for nearly all their gasoline use in local and commuter traveling. The use measured in kwh/month doesn't drop, it rises dramatically, even with maximally efficient appliances, lighting etc. Without some system to manage demand, from a crue TOU rate structure to IMEUC, the grid fails.

Your cost breakdown of total retail electric bill is probably correct for many places in North America but not here in Ontario. The savings would be higher in Ontario because our regulated energy billing rates are about 50% of our total utility bills. TOU rates will have roughly a 2 to 1 peak- to-off-peak ratio so our savings could approach 25% for aggressive load shifting. Also, these savings could go much higher if regulators moved towards much greater peak-to-off-peak ratios to reflect more closely real time rates generators are paid.

Initially Ontario's regulators are setting the ratio at only 2 to 1 because under their planned hourly TOU rate schedules, studies have shown most customers would see no change in their total bills on average if they practiced no load shifting at all i.e. it will initially be roughly revenue neutral for most customers who do nothing. What this will do however is set everyone up for the government to say OK if you now practice load shifting your bills will decrease accordingly, especially if regulators over time gradually increase the ratio so that it is no longer roughly revenue neutral as a means to increase total revenue collected. Many skeptics in the public think the latter is the real goal behind TOU rates in the first place. In other words, TOU rates provide a convenient way for rates to skyrocket where any irate public backlash can be addressed by telling you to simply load shift to mitigate the pain on our pocket books.

You are also correct in that adding smart meter infrastructure will add costs that will ultimately show up on our utility bills.

Ontario and some US states are planning on adding a fixed smart-meter charge to every monthly bill to pay for them. I was once told by a utility executive that in Ontario it might come in at $5.00 to $7.00 added to every bi-monthly bill, or $2.50 to $3.50 per month, depending on your particular utility company's size. The amount must be approved by the regulators, intended to pay back the cost of the meter infrastructure over 15 years. But being electronic meters their field life expectancy on average might only be 10 years, and likely less if they must roll trucks to replace obsolete meter technology as the technology changes over time. So guess what, that added meter charge on our bills will be permanent.

So if you combine all the other looming costs being dumped on our utility companies like smart grid technology, adding lots of renewable source intermittent generators, and the demands imposed by widespread Plug-in-Hybrid-Electric-Vehicles soon, everyone's utility bills are going to increase for many years ahead, probably significantly faster than inflation. Total reduced consumption measures from practicing more conservation and energy efficiency, and practicing more load shifting under TOU rates will be sold to the public as the only ways for individual customers to slow down those increases and make them less painful. The only way to avoid the pain will be implementing your own on-site micro-generator to become more independent of the grid, including selling power back to the grid to recover its initial cost.

Some believe, including a few authors on this website such as Elisa Wood and Lisa Cohn, that energy efficiency (EE) upgrades pose the greatest hope for the future, and could become a bigger trend than anything else we have seen or heard yet in the use of electricity. In spite of all the added technology to the grid and adoption of renewable energy sources, forcing greater energy efficiency on consumers will lead to the greatest total reduced consumption.

Witness the forced ban on incandescent light bulbs, plus the Energy Star ratings program foisted on consumer appliances, and soon many other consumer products will be legislated to use less energy. California just last week announced it will be imposing new higher efficiency targets for all large-screen televisions sold in the US within the next few years.

Imposed EE targets are having a profound impact on my industry, for it is in the electronics industry that these efficiency goals are being fervently pursued in design, and in many cases being achieved progressively year after year. Any new design nowadays involves consideration of reducing power consumption in any way possible, as I can attest being a product designer myself.

I can promise you this, all the information in the world about how you use your utility is only as effective as the guy that reads it and manages it. In todays world real time data analysis only works for companies who choose to employ an energy manager to review it. Trending behavoiral patterns and understanding the science of usage and demand is a profession. To do it effectively takes time and desire. Show me statistics regarding how many home owners have this amount of time on their hands to even consider this investment. I do agree that thirty day billing periods and monthly comparisons to last year are limited in there ability to help reduce usage; but dont you think it would be more effective to appeal directly to their wallet? If there is one thing that consumers understand its money, They are already taught about it in school at an early age. If you want to drastically reduce residential usage then you need to convert your real time energy data to a running dollar counter mounted right in the kitchen. Let your mom prepare dinner one night and watch the dollar meter cranking away while your bedroom lights, television, stereo, play station and widow ac unit are at full tilt. I promise you the grid will be fine.

What you describe for the kitchen counter already exists - it's called a real-time in-home energy display, and several companies have already created them. Most are designed to communicate directly to a smart meter's built-in radio or accessory radio if so equipped like Zigbee . The problem is most if not all utility companies don't have the money to simply provide them free to all their customers, nor are they interested by and large in selling consumer products to customers like a Home Depot does.

(If you want one now there is a model that's been on the market for some years from BlueLineInnovations.com called the PowerCost Monitor. It does not communicate with the meter directly but instead uses a clamp-on a wireless sensor on the meter housing that counts and times watt-hour pulses, and does not require your utility company to provide access to the meter's interior electronics.)

Hydro One, Ontario's largest residential utility company has conducted pilot study after study over the last many years and has proven just what you are talking about. Just having your running bill in your face every day in real time is enough to encourage average consumers to curtail their consumption. In study groups of hundreds of home owners they equipped with a real-time display, the more affluent consumers who could care less about their energy bills did not change their habits, but the lower income customers cut back by as high as 20%. Overall the average total reduced consumption was nearly 10% across the study groups. Can you just imagine millions of consumers equipped with one - a 10% energy consumption reduction would by like taking several large power plants off the grid all together !

As far as load-shifting under Time-Of-Use billing and analyzing any other conservation and efficiency measures, I agree spending one's time to manage one’s electricity use and monitor utility bills would be far too time consuming and daunting to do manually on a continuing basis. But.... just wait for it... companies are developing and have already tested Home Automation technology with PC software to analyze all your consumption habits from your smart meter data for you, and it will be capable of automating demand responses to real-time electricity price changes. In many cases consumers will be able to set-it-and-forget-it, eventually. One such company is Tendrilinc.com, another is Google.com.

I have at times caught my family being wasteful of electricity. I'll drag them all out to see the electric meter and SHOW them the little whirling disk and explain that each revolution costs MONEY from the family budget, money that can't be used for new clothes, makeup, or iPods.

Even though I do seem to get my point across, I do have to periodicly remind them, even at night with a flashlight!

Electrical savvy types of people like yourself probably don't need consumption monitors because you understand metering, the difference between power demand and energy consumption, and the nature of various loads in your home. What the Hydro One studies had revealed, and you probably also know yourself, is that the average consumer is quite ignorant on these matters, and need lots of education to understand them. Real-time energy monitor feedback is among other things a form education for people as well as a constant reminder.

Imagine yourself Joseph if gasoline pumps everywhere eliminated their running displays indicating the fuel being pumped and your running bill when you fill up. They then allow you to simply fill your car up every time you visited the gas station and drive off without paying. Then at the end of each month or every two months you received a non-itemized fuel bill in the mail. Would you stand for this ? I doubt it very much, and surely neither would the average consumer as there would surely be a huge public backlash.

Consider this is exactly the situation we have always had to deal with in buying electricity from our utility companies. Every time you throw a switch you are making a commercial transaction to buy electrical energy from your utility company, and consumers are effectively buying it blindly. If this isn’t enough, just imagine how much more confused the average consumer is going to get when Time-Of-Use rates get enabled by smart meters, and how interested the public will be in tracking their electricity bills if rates skyrocket in the future.

Agreed, we all would like to see electricity kept too cheap to meter in real time. We all have no big desire to spend more efforts at shopping for electricity, since many of us are already consumed to some degree shopping for food, gasoline, or any other consumption product, and don't really prefer to add electricity to the list. We've been spoiled for a very long time having such dirt-cheap electricity.

That my friend is about to change when electricity prices start going up substantially. One of the factors driving them up is when demands on the grid expand everywhere from plug-in electric vehicles start appearing in huge numbers before our children grow up.

I know what you are thinking Joseph - just build much more capacity like large central nuclear or coal generation plants for example, and then we'll have all the cheap electricity we can stomach. It ain't happening because the companies that build nuclear plants want far too much money up-front (in policymaker’s opinions) to build them, and the coal plants are becoming too hazardous for the environment. Labeled as unaffordable and/or bad for the environment, minimizing building them is driving policymakers in government to look for alternatives to meet future demand. And most feel no guilt or shame in openly admitting that it will mean a gradual end to cheap electricity down the road.

I can hardly wait for the day when smart meters or a smart grid will be able to tell how much the utility company must bill someone for a recharge. In the meantime, look for people filling up at any AC plug outlet they can access in place of driving to a standard gas station.