February 5, 2009

Dow: 8,063.07

Unemployment Rate: 7.2%

You Can’t Outsmart the Grid

You saw the ad on the Super Bowl and the President has often mentioned it. GE is promoting it and it seems to support the Pickens Plan. If you listen to supporters, the “smart grid” will speed renewable energy effortlessly around the country and end our dependence on foreign oil. Wow! Power for the 21^st Century and beyond!

But, this pesky part of the right side of my brain wondered how something that sounds too good to be true could be. None of the hoopla explains what the smart grid actually is. I was interested in learning more about this "Smart Grid" thingy I keep hearing about and found my way to a USA Today article.

The article contained the following about "Smart Meters."
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"Smart meters. Today, most consumers pay the same price for electricity, day or night. Digital meters let utilities offer variable prices to reflect wholesale power costs, like cell phone plans. Rates are typically highest at midday, when electricity usage peaks, and lowest in the wee hours.

Smart meters already are in 5% of U.S. homes and businesses, up from 1% two years ago, though many don't offer variable pricing yet. The devices will be linked to 40% of homes in five years, a recent FERC report says.

Consumers that choose time-of-use pricing are prodded to cut air conditioning use on hot days when the grid is stressed and shift, say, their laundry to later in the evening. Utilities avoid building plants needed only at peak hours. Customers on variable pricing in southern Illinois save about 10% on their bills, says program coordinator CNT Energy.

Companies such as GE are developing appliances that run at low levels when prices are high or turn on only after prices drop. Trilliant's software will even let consumers program their home networks from their iPhones."
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Brilliant! Use you air conditioner only on cold days to save electricity! Price electricity the same way that cell phone companies gouge consumers; by charging exorbitant rates when you use it and cheap rates when you don’t! That’s the ticket! Ummm… What if everyone started working nights?

Of course, smart meters are only one of the elements of the "Smart Electric Grid" according to what I've read. A big element of the plan is a new backbone of transmission lines and equipment to move electricity from as yet un-built windmill and solar farms in remote areas to places far, far, far, far, away where electricity is needed.

One of the questions I have about this is whether this will be as economical as building conventional generating plants closer to the places that need the power. I suspect it won't be. And I suspect the costs of building this new backbone will be vastly underestimated and will be paid by all of us, whether we will get power from these windmills and solar farms or not. Energy independence and saving the planet is a national priority after all.

I have no doubt that after decades of Federal obstruction we need an improved power grid, new electric generating plants as well as new oil refineries and oil and gas wells. I just have to wonder, if the Smart Grid is such a wiz-bang idea, why don’t the nation’s energy companies stop talking and build it? Why is there such a big effort to sell it to the American people and get the Federal Government to subsidize it and the taxpayers to pay for it?

     
But, my suspicions are really aroused by the Smart Meter. Right now I pay a flat rate for electricity. With the smart meter, I'll pay more for electricity used during the day when I need it and less during off-peak hours when I don't need it.

This may be smart for the grid but it ain't smart for the consumer. I think this is all about three things:

1. Finding excuses for not building coal and nuclear power plants.
2. Managing a planned shortage of energy.
3. Imposing more creative ways of taxing the use of electricity.

FDR got the TVA, Obama gets the Smart Grid, as always, you get the bill.

Where am I wrong?