A national smart grid has been at the forefront of Barack Obama’s energy administration, yet it is still struggling to get through the state level.
A smart grid replaces the traditional method of energy being transferred from the power station to residential homes and businesses. Instead of a meter on each individual home, the local energy company can track energy usage via a wireless signal broadcast. The idea being that now the power company can track when each home has its peak energy usage and for what it is directed for. With this knowledge, energy can then be modified on a pricing plan that allocates different rates for different times. Prime time energy usage during the day would be priced at a premium, based on the significant user demand at the time. Energy use at night will be priced at a rate below current levels, based on the scarcity of user demand at the time.
Further, a true smart grid will instill more control to the consumer. At present, several companies are scrambling to make technology that will be friendly enough to the user so that it will not be a hassle to manually control energy usage. For example, a family with parents at work and kids at school during the day can virtually shut down energy to the air conditioner while the family is not present. Based on economic rational choice theory, a consumer will be incentivized to monitor energy expenditure via a computer, smart phone, tablet etc. due to their cost out of pocket. According to reports, if this technology were to be implemented on a nationwide basis, energy usage can be expected to drop 10% by 2019. The Washington Post further details the benefits:
“For utilities, they are clear. The meter reader will become extinct. Diagnostics done by trucks will be done from a central office. And if homes and businesses cut energy use in peak demand hours, utilities can avoid building power plants that will operate only a few hours a day for just a few days a year. In California, for example, peak usage can be two-thirds higher than the demand at other times of the day. With climate change, the differential could become even more extreme.”
Energy companies are quick to point out the rapid increases in population where energy is already a costly premium. Predicating an argument around current consumption rates accompanied by a larger population would simply be unsustainable. Producers of both the energy and of the technology have combined in their efforts to move the issue forward. In California, a state known for their energy deficiencies, both have been lobbying hard for aggressive legislation to mandate a switch from the old power grid to the new Smart Grid. After 2009, when the American Investment and Recovery Act was signed into law by President Obama, which allocated $4.5 billion towards smart grid funding, California has worked to pass substantive reforms to the power grid. Several forms of bills have come out advocating different mandates for smart grids. Most recently, SB 12 was passed that mandated that by
“January 1, 2016, the (Public Utilities Committee) report to the Legislature assessing whether each electrical corporation can achieve a 33% renewables portfolio standard by December 31, 2020, and maintain that level thereafter, within the cost limitations.”
As part of an effort to emphasize the alternative energy resources at consumers’ disposal, namely solar and wind energy, states have put in place tax relief efforts to encourage the wide-scale installation of solar and wind panels. The city of Davis, California offered in this bill to offer subsidies to those that installed those panels.
Advocates of a solar panel have pointed out the financial advantages of installing these technologies. With a smart grid, instead of energy coming in one way from the power company, the homes that generate some of their own power can sell back their energy and have distributed it along the grid. Proponents in New Hampshire offered the cost benefit argument and included specifications in their energy legislature.
In spite of all the supposed benefits of the smart grid system, a vocal opposition has arisen and has been adamant about all its key flaws. Among a variety of complaints, groups and individuals are complaining about the presumptiveness of what an ordinary user is. While, an overwhelming majority of the working population works during the day Monday through Friday, there is a substantial amount of individuals, namely students, seniors, and the unemployed that have different circumstances that require them to use up energy at the peak pricing hours.
The expense of redesigning a system of energy for a city, let alone a state makes for large drawbacks as well. In a time of austerity at the state level, taking on large investments makes it difficult for legislators to agree. The CEO of the main energy company in Carolina said “Smart electricity meters aren’t on the way… Duke Energy still has $200 million worth of costs to recoup from installing the current meters for customers in North Carolina.” With this sort of cost associated with the installation and upkeep, the issue remains tenuous.
Stopsmartmeters.org is an organization outspoken about its desire to remain with analog meters. They focus on several key issues in regards to the switch. A common concern amongst the opposition is the safety of the meter both in regards to personal health but also private data. As a term of service for the meter, the electric company will be able to collect data as to how each home uses electricity. The energy companies are adamant about the privacy and anonymity of that data. Yet, critics are not assured by the promises of the electric companies.
As with cell phones and other wireless transmitting devices, a smart meter sends off radioactive waves in order to monitor energy usage. Critics have complained about health risks with this technology and have protested the mandatory implementation of this technology based around this premise. Recent studies have disproved the claims, but as the Washington Post reports, there remains a vocal minority adamant about the health risks involved. State legislatures in Virginia have listened and have hastily passed bills nudging the state to adapt the new technology.
Unperturbed, the federal Department of Energy insists on making the switch over. The alleged outdated Edisonian model of electricity distribution requires substantial costs just for upkeep. In their brochure directed to end-consumers, they detail all the reasons for the switch over but focus largely on the costs:
“A surprisingly substantial portion of your electric bill – between 33% – 50% – is currently assigned to funding our “infrastructure mortgage,” our current electric infrastructure. This item is non-negotiable because that infrastructure – power plants, transmission lines, and everything else that connects them – must be maintained to keep the grid running as reliably as it does.”
Despite the mounting evidence regarding the switch, advocates have conceded that the priority for this issue is highly dependent on the energy usage of the state. In states like California where the energy usage is exponentially greater during peak hours, a smart grid is of utmost concern. During those peaks hours where demand is much greater, power plants have to be utilized that serve no purpose during all the other hours of the day. With a smart grid, precise knowledge of current energy expenditures will render the extra power plants obsolete. Considering the cost of upkeep and maintenance this makes fiscal sense for those most affected.
Of course, for states that have more moderate summers and manageable energy costs, the benefits of a full transformation become marginalized. That is not to mention the fundamental concerns of privacy and safety, as well as the current outcry about government mandates. Needless to say, the federal government, as with many of its grants, puts the offer on the table for the states to adhere to the strict guidelines and based on how quickly the sum of money allocated for this project was claimed, this project is on its way to completion. It may only be a matter of time, though with countries like Brazil and China already well on their way to full implementation, it may be crucial the US caught up.
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