How to Build the Smart Grid Smartly

| Wed Mar. 4, 2009 4:58 PM PST
The Smart Grid transmits information between utility companies and household appliances, allowing you to automatically dial back energy use during peak hours. "In theory, the Smart Grid offers a user-friendly way to curb our electric appetites," Jenn Kahn wrote our in energy issue last May. "The most compelling thing about the Smart Grid is that it could change the way we use energy without requiring us to do anything."

Having read our magazine, I suppose, President Barack Obama recently set aside $4.5 billion in the stimulus bill to build a national Smart Grid. (At the time Kahn wrote her piece, Smart Grid boosters were pining for a meager $400 million in R&D funding). But it turns that the Smart Grid requires us to do at least one thing before it will pay off: figure out how to build it. It's going to be harder than we thought:

Smart grid operation standards have not been designated yet despite a provision in the 2007 energy bill calling for the Commerce Department's National Institute of Standards and Technology to come up with standards with the help of the Federal Energy Regulatory Commission and other organizations so that the technology can easily communicate on the same platform -- a concept known as interoperability. That lapse combined with the general lack of public knowledge about the smart grid and how to manage energy in real-time could be a recipe for failure, [Alaska Senator Lisa] Murkowski said.
"We are playing more than a game of catchup here," Murkowski said. "This is too important to get it wrong."

So the Smart Grid isn't exactly shovel-ready. The electric industry needs nine months to a year to agree on standards for the grid, the Times reports. But Kahn's piece illustrates why rushing the grid would be a mistake:

In one scenario, the utility—and eventually, our appliances themselves—would do the thinking, raising and lowering the power pulled into our houses so subtly that we'd hardly notice it. In the current "dumb" grid, information runs in one direction: from the user to the utility. As a result, there's usually no way for consumers to know about real-time rate changes until weeks later, when the added cost shows up on their electricity bill. In a smart system, usage and rate information would flow both ways and also arrive in real time.
But is the Don't Tread on Me nation ready to hand control of the thermostat over to for-profit utilities that don't always have our financial best interest at heart? (See the 2001 Enron-triggered California energy crisis.) It's not impossible. Many of us have come around to paying our bills automatically. With the appropriate protections in place, there's no reason to think that consumers would balk at a chance to save money and energy—so long as that six-pack stays cool.
Congress will need to write those protections into law if it wants the Smart Grid to be credible with consumers. It will also need to ensure the grid doesn't become a mishmash of competing technologies:
In the absence of federal standards for the Smart Grid and smart appliances, any utility that dared to update its grid would have to gamble that its new features would remain compatible with next-generation technology. As Steve Hickok, deputy administrator of the Bonneville Power Administration, puts it, "No one wants to get stuck with a Betamax."
In both cases, only the government has the authority to pull this off. That's why, despite the time and work, the $4.5 billion is ultimately money well-spent.
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