Survey Says Utilities are Losing Interest in Smart Grid

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Are Utilities Getting Cold Feet over Smart Grid?

Just as the torment of installation of smart meter is turning into the point of critical mass for smart meter deployment are utilities changing their minds about smart grid?  That is the question raised by the results from the Oracle Smart Grid Challenges and Choices: Part 2 survey of North American utility executives.

Maybe utility executive are worn down by the hassles of smart grid deployment, regulatory scrutiny and the looming costs of what’s next after all those meters start sending data every 4 hours, of was that one hour—or 15 minutes in the years ahead.  But smart grid dropped as a priority for the utility executives surveyed from #2 to #5 on their priority list.  Back at the top are the traditional utility priorities of improving reliability and controlling costs and thus rate increases at 40% each.  Paying attention to demand response and energy efficiency came in #3 at 33%.  Updating infrastructure was #4 at 29% and then there it was with 26% at the bottom of the barrel—implementing smart metering!

What!#*?

If smart grid is only about smart meters then the entire project is a big waste of money. But just 49% of utility executives surveyed think smart grid is the answer for improving energy service.

Of the 152 utility executives surveyed 71% say getting customers to accept the changes smart grid will bring is essential to its success, but only 43% say they are doing anything about educating their customers.  Why is that?  Maybe they fear the Bakersfield Effect of angry customers waving their sky high utility bills and ranting about why their utility is taking advantage of them by cramming this change down their throats.

Are utility executives afraid of their customers?

More than 75% of those same executive surveyed say they rely on bill stuffers and their websites to get information to customers.  Yet in the age of Tweets and TXTs customers routinely say they want more interactive communications with their service providers including utilities.  Here’s the thing, those utility executives don’t really think customers will actually make use of all the capabilities smart grid will bring. The survey says the utility bosses expect only 38% will get with the smart grid program.

Why would they think that?

Because traditionally, customer participation in energy efficiency, using programmable thermostats or sign up for demand response programs and other efforts to get up off the couch to pay attention to our wasteful energy ways sucks. But if state regulators want programs then utility execs will pump them out.

So what would utilities rather do than force smart meters down our throats?

  1. “Providing customers with better information”
  2. “Construction of power plants”
  3. “Good asset management programs; good financial stability”
  4. “Wind turbines and nuclear power”
  5. “Streamlining operations and diversifying renewables across the board”
  6. “Keep doing what we have been doing for the last 72 years”

This Oracle survey is the most discouraging report card on smart grid prospects we’ve seen to date. If its results are validated by other studies it sends a chill across the utility industry, but it opens the door to new entrants better suited to engaging customers, offering value-added smart grid enabled services.  But the sobering reality is smart grid will take longer, maybe much longer to implement and the focus will almost certainly focus on helping utilities realize the benefits of smart grid from distribution automation, lower labor costs and improved operational control and reliability.  Customer benefits will have to wait for disruptive technology and competitive pressure from new entrants to put the big data spilling out of those smart meters to work.

Only 24% of utility executives surveyed said they were rolling out smart grid deployment assertively.  The rest are studying the matter or checking out the success or failure of their peers.  This is not a vote of confidence in the transformation to a digital clean energy economy. The risk to utilities of dragging their feet is the loss of the utility control over the gateway to customers.  It does not have to be that way but if the Oracle survey is validated it might turn into a self-fulfilling prophesy.