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A Utility of the Future Needs to Be Real About Electricity Consumers

January 13, 2013

Interesting things are happening in Maryland relating to electric utility regulation.

After the Derecho storm in June 2012, Governor Martin O’Malley signed an Executive Order that assembled a Task Force to identify how to improve the reliability and resiliency of the MD electrical grid. As reported by Smart Grid News, this Task Force wrote a report “supporting a transition by electric utilities to new business relationships with their customers, regulators, and competitors that would better align utility compensation with consumer benefit and incorporate a new technological architecture of digital information, controls, and end uses.” Now MD is soliciting proposals for a pilot project that experiments with a new model for electric utilities.

Spearheaded by the Energy Future Coalition and Galvin Electricity Initiative, this is an exciting new opportunity to build a utility from the ground up that is focused on consumer needs. These organizations favor micro-grids, energy efficiency, and enhanced consumer access to information. The Galvin Electricity Initiative has a set of “Electricity Consumer Rights”:

1. All electricity consumers have the right to receive information on the ever-changing, real-time price of electricity – called dynamic pricing – and the means and incentives to use this information to their best advantage.

2. All electricity consumers have the right to system reliability and service quality that protects life and safety under all conditions, and meets the needs of today’s digital society.

3. All electricity consumers have the right to hold their utilities accountable to a publicly open set of performance standards.

4. All electricity consumers have the right to buy their electricity services from any source they choose in open, competitive markets.

5. All electricity consumers have the right to sell the excess power they produce or store back to the grid at a fair market price.

6. All communities have the right to improve their electricity distribution system, with the full cooperation of their utility, to best serve citizen needs.

But for all their talk, this “bill of rights” seems silly to me. My only response is “ok … then what?” In today’s information age, you can’t stop at giving people information. We have very little understanding of how to communicate electricity use information to consumers (which is where my research comes in!). Electricity use feedback can take many forms, but often it involves processing A LOT of information. This is not trivial. Many Americans won’t be able to understand or use the information unless it is pre-processed and made easier to understand. The current state of research has not figured out what that needs to look like. In PA, electricity consumers can choose their utility, but most residential consumers don’t. To be honest, as a resident of PA, I haven’t even really looked into it even though (a) I know about it, (b) probably should, and (c) do research on behavioral interventions for reducing residential energy usage. It’s shockingly hard to care about it because it seems like a lot of trouble for not much benefit. I have classes and laundry and exams to worry about right now! I’ll think about changing my electricity supplier later.

Further, it’s hard to imagine where vulnerable populations such as low income consumers fit into this framework. Do electricity consumers have a right to energy assistance? As a group, low income consumers are most likely to be disadvantaged by real-time pricing. Just because we think consumers should be able to shift their usage patterns, doesn’t mean that they can or will understand that they need to. Even worse, low income consumers are less likely to “hold utilities accountable” because they are less likely to have the time or energy to deal with it. In my mind, this is the role of a Consumer Advocate (I’ll point out that PA has a particularly impressive website) because it’s not reasonable to expect consumers to do all this work.

The leaders of the Galvin Electricity Initiative have a book titled Perfect Power and I managed to acquire a (signed!) copy through a free book pile in my department. I should read it – could be interesting.

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