If you live in Boulder, you’re going to have the choice to have entirely new technology running in your home. If you learn how to manage it correctly, you might cut the price of your utility bill.
Or could you end up paying more?
When was the last time you got new technology for free? Your Internet connection, for example, added to your monthly bills. So did your cell phone. All things you use everyday, but you do pay for them.
Just how Xcel pays for the $100 million investment to make Boulder the nation’s first "Smart-Grid" city is still a bit hazy. Putting a “smart” meter on your home sounds like a way to help the environment, and Boulder officials tout the new technologies as another tool in their Climate Action plan.
In all the excitement, the subject of “pricing” really hasn’t come up much yet. But the Smart Grid also may open up the idea of “dynamic” or “time of day” pricing. In 2005, Xcel began charging seasonal prices, with higher rates in the summer. When I asked Xcel spokesman Tom Henley if some type of higher rates for “peak” hours vs. lower costs for “off-peak,” he said it’s “one of the possibilities.”
Getting “real-time feedback” on the price of that power and if renewable sources are available is what the Smart Grid can offer, explains Jonathan Koehn, Boulder’s environmental affairs manager. “Absolutely it is possible to lower your utility bill” by making more “conscious decisions” on how you use power to run, heat and cool your house.
Although the program is voluntary, Koehn expects smart meter installation to be pretty aggressive. Xcel says 25,000 meters could be installed by August, with 50,000 in place.
If the Smart Grid succeeds in Boulder, a rollout to customers around Colorado could be next. Xcel serves eight states, so the Boulder test is important.
Xcel will pay about 15 percent of the Smart Grid’s cost, spokesman Henley confirmed. Its partners – Accenture, Current Group, Schweitzer Engineering Laboratories and Ventyx -- also will put in funding. Grants and private funding are possible because although smart meters aren’t that new, with utilities in New York and California using them, the industry will watch the scale of converting an entire city.
“This is R&D at this point,” Henley says. “We hope to go in and prove out the value.” If customer savings can be proved, Henley adds, they might take their case to the Pubic Utilities Commission to try and recover funds.
That’s especially when one person, Jim Greenwood, director of the Office of Consumer Counsel for Colorado, will be watching closely. “Our concern,” he says, “is about consumers.”
“It’s a delicate balancing act” in programs like this, he says, and there are always “participants” and “non-participants.” Some unable to reap benefits from new technology could be “the ones who can least afford” new energy-efficient appliances or home improvements.
So what might Boulderites expect as they start using this in-home “black box” to monitor energy use?
It’s clear both Xcel, as well as the customer, will be tracking the results. Experts say the “peak” time energy is consumed is usually from about 4 p.m. into later in the evening, when people return from work, start cooking, washing dishes, watching TV, etc.
Under discussion by utilities across the U.S. is “Time of Day” pricing, or TOD. Ed Legge, spokesman for the Edison Electric Institute, an association of shareholder-owned electric companies, says there can be “political ramifications” toward TOD rates, especially with commercial customers since businesses can’t always shut down machinery to avoid peak hours.
Legge says utilities are moving toward what’s called “dynamic” pricing, where utilities send a signal to “smart” thermostats or appliances and to customers telling them they are in a higher-priced period.
For customers who have the technology to run their dishwasher or do their laundry when rates are cheaper, this might be a good thing.
But what happens to those, maybe a married couple who both work, who don’t avoid the peak hours? Will they pay more?
Boulder’s Smart Grid is much more than shifting energy use. It will modernize what Koehn calls a “fairly antiquated” grid. Customer service and reliability should improve, particularly during outages. As residents add solar, wind and plug-in electric car, the digital Smart Grid might reduce the need for another coal-burning plant.
Boulderites are Internet savvy, plugged in and early adapters of new technologies. Xcel made a natural choice by picking the city. But if it costs $100 million for a Smart-Grid city of 100,000, how much does it cost to wire a city like Denver, a city five times the size?
These are questions that eventually Xcel will need to answer. And as usual, you the consumer must ask, “What will all of this cost me?”
Jerry W. Lewis is also a contributing columnist for Boulder County Business Report. Reach him by e-mail at firstname.lastname@example.org.