Monday, August 2, 2010

A surprising challenge: selling Smart Grid

To a salesman, it must sound like a dream product: it will allow greater use of solar and wind energy to save on our carbon emissions, improve the reliability of our electric power system, give consumers more control of their electric power and its cost, help avoid the cost of building expensive new power plants and help utilities communicate with customers during emergencies. Slam dunk, huh?

So it would seem. But as Hawaii found out last week – after similar experiences in California, Texas, Illinois, Indiana, Maryland and other states – making the case for the Smart Grid and Smart Meters has not been so easy. It has run into serious opposition from several public service commissions, many individual consumers, media commentators and strong interest groups like AARP.

Smart Grid is essential to the future of our electric power system, as we all want it to evolve. Without it, energy efficiency advancements and incorporation of renewable energy sources, scattered around geographically, will be impossible achieve at the scale we need. And without it we will need to build far more peak-load power plants, to meet energy demand when it spikes to its highest levels on summer afternoons, which will further drive up the cost of electricity.

But selling this concept has hit a series of obstacles. Some companies ran into problems with regulators and consumers because of their strategy for paying for the Smart Meter investment. But others may have hit potholes because they took it for granted that their customers would embrace the new devices. Their communications emphasized the fancy new technology and all its neat features; what they should have emphasized – what successful companies emphasize – is the personal benefit that individual customers will receive.

How to sell Smart Grid? Michael Howard, the CEO of the Electric Power Research Institute, told the Edison Electric Institute’s annual conference last month that there are three answers: “Communicate, communicate, communicate.” And how best to communicate? Joseph Rigby, CEO of Pepco Holdings, Inc. in Washington, said it has to begin with person-to-person communications, “in meetings like this.”


And it all must begin with the right message - to show customers and regulators that the broad benefits of the Smart Grid, including reliability, faster outage notification and customer control, have a direct impact on individuals who use electric power.

Partly because of federal stimulus funding, more utilities are making plans for roll-outs of Smart Meters in their service areas. Let’s hope that they have learned the lessons from the pioneers who seemed to take regulatory approval and customer support for granted – because it looks so much like a slam dunk.

- Potomac Communications Group

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