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UCAN'S Smart Grid Wellness Prescription: 8 Not-So-Easy Steps Toward Consumer Acceptance By Guest Editorial May 18, 2010 - 12:40:28 PM
By Michael Shames
When it comes to these fairly sophisticated and evolving businesses, being a consumer is a risky proposition.
So ask these same consumers about their excitement about the emerging energy services that will be tied to Smart Grid deployment and their general reaction will be akin to the resignation of having to go to the dentist's office. Under their breath they'll collectively mutter: "This isn't going to be fun." And if history is any gauge, they are correct. The telecommunications, financial and electric deregulation experience during the 1990s created more consumer migraines than a tone-deaf heavy metal band. And they have persisted into this new century.
As we enter the brave new Smart Grid world, it behooves regulators and marketers to learn from the lessons of the past and avoid future headaches. My particular prescription for Smart Grid wellness involves adherence to eight basic and long-established consumer rights.
1. Right to Receive Reliable and Affordable Energy Services
Smart Grid technology is being touted as a means to protect consumers and industries from outages caused by archaic distribution systems. As consumers adapt to the deployment of smart meters, they have a right to retain service reliability. The utilities and regulators appear to be committed to adopting cyber security to minimize the threat of the Smart Grid being hacked, causing service interruption and other dangers. By incorporating these protections into the deployment plan, the utilities will assure consumers that they are taking the best available steps to ensure the protection of the Smart Grid. These protections should limit third-party access that could result in service disruption from either the consumer side or the utility side of the Smart Grid. Such protections should also be developed to minimize the risk of service interruption from interference. Similar protections must be put in place to protect consumers from service disruption that arise from disputes with third parties providing Smart Grid services. And given the mandatory nature of smart meter deployment, consumers should not feel that the deployment of smart meters resulted in an increase in their rates. You don't want to see what an angry, distrustful consumer looks like. Trust me. It's not pretty.
2. Right to Consistent and Accurate Product and Service Performance
One of the great promises of the Smart Grid is that it will stimulate new products and services that consumers can use to control their home and business energy consumption. New in-home devices (IHD) and smart appliances will play a big role in bringing these new services to consumers. Consumers need to be assured that these devices perform consistently with their intended use. New technology does not always perform as promised, sometimes failing to achieve its intended purpose. Consumers will rely on these devices to help control their energy consumption and to provide accurate data and information about their energy use. If these devices and appliances do not function as intended, consumers could face higher energy costs and a host of headache-inducing frustrations. Regulators and the industry need to create assurances that IHDs will function properly and that they will correctly interact with the utility’s grid operations. For example, utilities should fund regional testing labs to ensure all available IHDs are compatible in their service area. In addition, the utilities should make their device functionality findings public so consumers are properly informed about the quality of the IHDs by a disinterested third party.
3. Right to Truthful Advertisement, Complete Information and Stable Third Parties
In addition to product liability, the industry needs to assure consumers that service providers will perform according to their representations. One essential step: Create guidelines to ensure truthful and clear advertising. Even further, there must be clear guidelines requiring that service-associated hardware and software meets the adopted Smart Grid standards. The hardware and software must not increase consumer cyber security risks, service interruption risks, cause excessive energy consumptions, or otherwise do anything outside their intended and represented manner.
Consumers should also not have to risk losing power or face increased costs because of unscrupulous third parties. Steps must be taken to limit the ability of fly-by-night or unsecured third parties to offer services to the consumers. Preventative regulations include requiring companies wanting to access customer data to make a showing of financial stability and fulfill a bonding requirement. Coupled with industry certification standards, these steps will help ensure that consumers know which third parties provide the most reliable products and services.
Next week in Part 2: Giving consumers choices and control – plus a task list for regulators.
Michael Shames is Executive Director and co-founder of the Utility Consumers' Action Network (UCAN), a non-profit consumer watchdog group made up of 31,000 San Diego households and small businesses. UCAN represents the interests of San Diegans in energy, telecommunication and Internet matters before the state and federal regulatory bodies. He also serves as an expert witness and attorney on behalf of UCAN and an adjunct professor at University of San Diego School of Business. . You might also be interested in … The Six Most Important Smart Grid Trends New Industry Group Will Try to Bring Consumers to the Party Blowback Attack: The Smart Grid’s Greatest Danger?
Smart Grid Privacy Part 1: How to Keep Your Customer Data Protected
Smart Grid Privacy Part 2: Anticipate the Unanticipated Smart Meter Paranoia: Could a Simple Toggle Switch or Software Fix Solve It? .
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