Just When You Thought It Was Safe To Wade Back Into The Smart Grid Waters
July 26, 2011 1 Comment
It has never ceased to amaze me how frequently the utility industry inflicts pain upon itself. It seems as though they just keep shooting themselves in the foot on purpose. Unfortunately, when one of them shoots themselves in the foot, it oftentimes damages the entire industry’s reputation.
Case in point, the very recent actions by BGE and the article, “Energy-saving plan angers BGE customers as AC goes out“ from The Baltimore issue dated Sun July 23, 2011. These actions put a major nail in the coffin for the consumers’ future uncontested acceptance of smart grid initiatives. It is like a sad comedy of errors, and I believe it will cause a major, if not impossible, hole for the industry to climb out of.
With the smart meter backlash and Opt-Out movements going-on across the country, this could not have come at a worse time for the industry. Considering all of those utilities who have worked hard to win the trust and hearts of their consumers in Smart Grid and Home Area Networks (HAN) concepts and technologies, it saddens me to see so much of their hard work go down the drain. They will now have to work 4 times as hard just to maintain their present position in the avalanche of negative press that will flow from this.
It is really hard to know where to start to repair all of this backlash because it is almost too unbelievable. With all the negative press about smart meters and Opt-Out issues already simmering, the recent heat wave has just unloaded additional fuel on the firestorm of negative customer perceptions out there. They have invented “Smart Grid Frankenstein” for every utility in the country.
First of all, in the Baltimore Sun’s article, a section states:
“The extreme heat triggered the first “emergency event” in the four-year history of the program, and the effects were different from what customers had come to expect — many wondered why they couldn’t override the shutdown.”
Note, “the effects were different from what customers had come to expect“. This means that the program that customers had signed up for did not live up to their expectations. Marketing 101 tells you that when this happens, the product is dead in the water. The second part of that section then hammers the stake in the heart:
“..many wondered why they couldn’t override the shutdown.”
What we are talking about here is a Demand Side Management (DSM) program that went into effect and then, during the worst heat wave in 4 years, allowed end-customers air conditioners to be shut down for up to 10 hours. If you have been reading the same backlash articles I’ve been seeing, then you know that this is the one
thing that all smart meter/grid opponents feared – a utility taking control of their equipment and then not returning it to the customer’s control in an emergency. The privacy groups will have a field day with this situation, and I think you will see litigation as a result since some households were put at risk during the crisis. We can only pray that the utility’s actions caused no personal injuries during this heat wave. It may still be too early to know the full ramifications for sure, but you can bet that the legal bagels are all over it.
Unfortunately for the industry, it will not just stay in Baltimore but will travel the nation, if it has not already done so. The article also stated,
“Customers complained en masse Friday — on social networking sites, over the phone and by email — about the company’s energy-saving program. Many people thought that the program was misrepresented in promotional materials.”
Unlike Vegas, what happens at one utility does not stay at that utility. This will be hitting the newswires once the media runs out of deficit spending, phone hacking, and madmen news to report. It will certainly surface at every future PUC public hearing when a utility wants to implement smart meters or DSM programs. Remember, the customers in Baltimore got a different effect than what they had expected. No amount of marketing spin or tap dancing is going to erase that from the minds of the conspiracy theorist or privacy advocates. Every energy management program devised by utilities will have to jump through new hoops, and the old marketing gimmicks will no longer work. Not many of them, if any, were really working anyway. (California Utility HAN Numbers: Very Low)
I implore you to read the article and see if it strikes you as hard as it did me. Mark my words, this has happened before, and, once again, the results will not be pretty for utilities. Each utility had better come up with a new plan – and come up with it quickly. I have already begun to adjust and position my strategies and thinking in light of this event. You can bet that the opponents have their guns loaded with this new ammo and pointed at Smart Grids and Home Area Networks.
I realize that most utility employees are trying their best to do their jobs, but it seems like a new breed of fix-it leaders are marching the utility industry down the path to a self-fulfilled Armageddon. Many new faces have emerged in the industry with ideas that may look great on the surface, but they seem to fail to realize the sensitivity of the markets served by utilities. These dominant voices start speaking and have all the right annunciations and presentations but lack the basic industry facts. Utilities are businesses that are allowed to be oligopolies with restraints that result in close public scrutiny when things go wrong. There are issues that utilities need and want to undertake, but they must not take on unnecessary or reckless risk. The unfortunate incidents in Baltimore will play out across the country and, every utility will have to now rethink its’ strategy and presentation on Smart Grids.
Pate Associates 